The Kauffman Index of Entrepreneurial Activity: 1996-2012

Abstract

The Kauffman Index of Entrepreneurial Activity is a leading indicator of new business creation in the United States. Capturing new business owners in their first month of significant business activity, this measure provides the earliest documentation of new business development across the country. The percentage of the adult, non-business owner population that starts a business each month is measured using data from the Current Population Survey (CPS). In addition to this overall rate of entrepreneurial activity, separate estimates for specific demographic groups, states, and select metropolitan statistical areas (MSAs) are presented. The Index provides the only national measure of business creation by specific demographic groups.

New 2012 data allow for an update to previous reports, with consideration of trends in the rates of entrepreneurial activity over the seventeen-year period between 1996 and 2012. The Kauffman Index reveals important shifts in the national level of entrepreneurial activity and shifts in the demographic and geographic composition of new entrepreneurs across the country. Also, new for 2012 is the reporting of trends in entrepreneurial activity among veterans. The estimates reported here for veterans represent some of the first evidence on business creation for this group.

Keywords: entrepreneurship, self-employemnt, business creation

JEL Classification: L26: Entrepreneurship