Abstract

https://ssrn.com/abstract=2559803
 


 



Is Regulation to Blame for the Decline in American Entrepreneurship?


Nathan Goldschlag


Center for Economic Studies, U.S. Census Bureau

Alexander T. Tabarrok


George Mason University - Department of Economics

December 1, 2014

GMU Working Paper in Economics No. 15-11

Abstract:     
Mounting evidence suggests that economic dynamism and entrepreneurial activity are declining in the United States. Over the past thirty years, the annual number of new business startups and the pace of job reallocation have declined significantly. A variety of causes for these trends have been suggested, including an increasing ability of firms to respond to idiosyncratic shocks, technology induced changes in the costs of hiring and training, and increasing regulation. This research combines data from the Statistics of U.S. Businesses, which contains measures of the decline in economic dynamism, with RegData, a novel dataset leveraging the textual content of the Code of Federal Regulations. RegData contains annual industry level measures of the stringency of regulation. By combining these data, we are able to estimate the extent to which changes in the level of federal regulation can explain decreasing entrepreneurial activity and dynamism. We find that Federal regulation has had little to no effect on declining dynamism.

Number of Pages in PDF File: 46

Keywords: regulation, entrepreneurship, job creation, job destruction

JEL Classification: E60, G18, M13, J63


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Date posted: February 5, 2015 ; Last revised: March 22, 2016

Suggested Citation

Goldschlag, Nathan and Tabarrok, Alexander T., Is Regulation to Blame for the Decline in American Entrepreneurship? (December 1, 2014). GMU Working Paper in Economics No. 15-11. Available at SSRN: https://ssrn.com/abstract=2559803 or http://dx.doi.org/10.2139/ssrn.2559803

Contact Information

Nathan Goldschlag
Center for Economic Studies, U.S. Census Bureau ( email )
4600 Silver Hill Road
Washington, DC 20233-9100
United States
Alexander T. Tabarrok (Contact Author)
George Mason University - Department of Economics ( email )
MSN 1D3
4400 University Drive
Fairfax, VA 22030
United States
703-993-2314 (Phone)
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