Startups and Employment Following the COVID-19 Pandemic: A Calculator

21 Pages Posted: 8 May 2020

See all articles by Petr Sedlacek

Petr Sedlacek

University of Oxford

Vincent Sterk

University College London

Date Written: April 2020

Abstract

Early indicators suggest that startup activity is heavily disrupted by the COVID-19 pandemic and the associated lockdown. At the same time, empirical evidence has shown that such disturbances may have long-lasting effects on aggregate employment. This paper presents a calculator which can be used to compute these effects under different scenarios regarding (i) the number of startups, (ii) the growth potential of startups, and (iii) the survival rate of young firms. We find that employment losses can be substantial and last for more than a decade, even when the assumed slump in startup activity is only short-lived.

Keywords: COVID-19, employment, Macroeconomics, Startups

JEL Classification: D22, E23, E24, I10

Suggested Citation

Sedlacek, Petr and Sterk, Vincent, Startups and Employment Following the COVID-19 Pandemic: A Calculator (April 2020). CEPR Discussion Paper No. DP14671, Available at SSRN: https://ssrn.com/abstract=3594304

Petr Sedlacek (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Vincent Sterk

University College London ( email )

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