Working Paper: NBER ID: w27907
Authors: Shai Bernstein; Richard R. Townsend; Ting Xu
Abstract: 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.
Keywords: Economic downturn; Talent flows; Startups; Flight to safety; COVID-19
JEL Codes: E32; J22; J24; L26; M13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic downturns (F44) | job seekers' preferences (J68) |
| job seekers' preferences (J68) | applications to startups (M13) |
| economic downturns (F44) | job seekers' search parameters (J68) |
| job seekers' search parameters (J68) | applications to startups (M13) |
| high-quality candidates (D79) | applications to early-stage startups (M13) |
| economic downturns (F44) | flight to safety in job preferences (J28) |