54 Pages Posted: 7 Apr 2021 Last revised: 29 Nov 2021
Date Written: November 24, 2021
Republicans start more firms than Democrats. Using a sample of 40 million party-identified Americans between 2005 and 2017, we find that 6% of Republicans and 4% of Democrats become entrepreneurs. This partisan entrepreneurship gap is time-varying: Republicans increase their relative entrepreneurship during Republican administrations and decrease it during Democratic administrations, amounting to a partisan reallocation of 170,000 new firms over our 13 year sample. We find sharp changes in partisan entrepreneurship around the elections of President Obama and President Trump, and the strongest effects among the most politically active partisans: those that donate and vote.
Keywords: Entrepreneurship, Politics, Partisanship
JEL Classification: G12, G14
Suggested Citation: Suggested Citation