Shai Bernstein of Harvard Business School reviews “The Promise and Peril of Entrepreneurship: Job Creation and Survival among US Startups” by Robert W. Fairlie, Zachary Kroff, Javier Miranda, and Nikolas Zolas. The Econlit abstract of this book begins: “Explores entrepreneurial job creation, survival, and ownership demographics, detailing a new dataset that follows the universe of startups in the United States, the novel and important findings that resulted from analyzing these and related data, and the implications for evaluating policy and the fundamental nature of entrepreneurship.”

Using proprietary data from AngelList Talent, we study how startup job seekers’ search and application behavior changed during the COVID-19 downturn. We find that workers shifted their searches and applications away from less-established startups and toward more-established ones, even within the same individual over time. At the firm level, this shift was not offset by an influx of new job seekers. Less-established startups experienced a relative decline in the quantity and quality of applications, ultimately affecting their hiring. Our findings uncover a flight-to-safety channel in the labor market that may amplify the procyclical nature of entrepreneurial activities.