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Flight to Safety: How Economic Downturns Affect Talent Flows to Startups

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.

01. March 2024

Authors Shai B. Bernstein Richard R. Townsend Ting Xu

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Professor Shai B. Bernstein, PhD
Economist

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