Publications
Publications
- March 2024
- Review of Financial Studies
Flight to Safety: How Economic Downturns Affect Talent Flows to Startups
By: Shai Bernstein, Richard Townsend and Ting Xu
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
Citation
Bernstein, Shai, Richard Townsend, and Ting Xu. "Flight to Safety: How Economic Downturns Affect Talent Flows to Startups." Review of Financial Studies 37, no. 3 (March 2024): 837–881.