Flight to Safety: How Economic Downturns Affect Talent Flows to Startups
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.
Non-Technical Summaries
- After the outbreak of COVID-19, more-experienced and higher-quality job applicants shifted from early-stage companies to the safety...
Published Versions
Shai Bernstein & Richard R Townsend & Ting Xu & Holger Mueller, 2024. "Flight to Safety: How Economic Downturns Affect Talent Flows to Startups," The Review of Financial Studies, vol 37(3), pages 837-881.
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