Meghana Ayyagari, Vojislav Maksimovic, 25 March 2018

Recent press reports have highlighted the decline of US entrepreneurship. Using data on workers in 800+ occupations in over 1.2 million establishments, this column shows that there has been a decline not only in the number of new businesses in US manufacturing, but also in their size and quality. The proportion of cognitively demanding tasks at new firms has been declining substantially over time, pointing to a process of technological polarisation as incumbents upgrade human capital while entrants focus on low-skilled niches.

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