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  • 2022
  • Working Paper
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Flight to Safety: How Economic Downturns Affect Talent Flows to Startups

By: Shai Bernstein, Richard Townsend and Ting Xu
  • Format:Print
  • | Language:English
  • | Pages:61
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Abstract

Using proprietary data from AngelList Talent, we study how individuals’ job search and application behavior changed during the COVID-19 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 as well as within a 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.

Keywords

Startup Labor Market; Flight To Safety; COVID-19; Recession; Business Startups; Human Capital; Business Cycles; Health Pandemics

Citation

Bernstein, Shai, Richard Townsend, and Ting Xu. "Flight to Safety: How Economic Downturns Affect Talent Flows to Startups." Harvard Business School Working Paper, No. 21-045, September 2020. (Revised March 2022.)
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About The Author

Shai Benjamin Bernstein

Entrepreneurial Management
→More Publications

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More from the Authors
  • Why Decentralized Crypto Platforms Are Weathering the Crash By: Shai Bernstein and Scott Duke Kominers
  • Ribbit Capital and the Gauntlet Investment Opportunity By: Shai Bernstein and Allison M. Ciechanover
  • The Contribution of High-Skilled Immigrants to Innovation in the United States By: Shai Bernstein, Rebecca Diamond, Abhisit Jiranaphawiboon, Timothy McQuade and Beatriz Pousada
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