Working Paper
Business Formation: A Tale of Two Recessions
Abstract: The trajectory of new business applications and transitions to employer businesses differ markedly during the Great Recession and the COVID-19 recession. Both applications and transitions to employer startups decreased slowly but persistently in the post-Lehman crisis period of the Great Recession. In contrast, during the COVID-19 recession new applications initially declined but have since sharply rebounded, resulting in a surge in applications during 2020. Projected transitions to employer businesses also rise, but this projection is dampened by a change in the composition of applications in 2020 toward applications that are more likely to be nonemployers.
Keywords: COVID-19; business failures; liquidity; small business;
JEL Classification: D2; E65; G33;
https://doi.org/10.29338/wp2021-05
Status: Published in 2021
Access Documents
File(s): File format is application/pdf https://www.frbatlanta.org/-/media/documents/research/publications/wp/2021/01/29/05-business-formation--tale-of-two-recessions.pdf
Bibliographic Information
Provider: Federal Reserve Bank of Atlanta
Part of Series: FRB Atlanta Working Paper
Publication Date: 2021-01-29
Number: 2021-5