Flight to Safety: How Economic Downturns Affect Talent Flows to Startups / Shai Bernstein, Richard R. Townsend, Ting Xu.

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Bernstein, Shai

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w27907.Publication details: Cambridge, Mass. National Bureau of Economic Research 2020.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Using proprietary data from AngelList Talent, we study how individuals' job search and application behavior changed during the COVID downturn. We find that job seekers shifted their searches toward more established firms and away from early-stage startups, even within the same individual over time. Simultaneously, they broadened their other search parameters. Relative to more established firms, early-stage startups experienced a decline in applications, primarily driven by higher quality candidates. These declines hold within a firm or job posting over time. Our findings uncover a flight to safety channel in the labor market, which may amplify the pro-cyclical nature of entrepreneurial activities.

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October 2020.

Using proprietary data from AngelList Talent, we study how individuals' job search and application behavior changed during the COVID downturn. We find that job seekers shifted their searches toward more established firms and away from early-stage startups, even within the same individual over time. Simultaneously, they broadened their other search parameters. Relative to more established firms, early-stage startups experienced a decline in applications, primarily driven by higher quality candidates. These declines hold within a firm or job posting over time. Our findings uncover a flight to safety channel in the labor market, which may amplify the pro-cyclical nature of entrepreneurial activities.