Accounting for the Decline in Entrpreneurship in the United States: 1978-2011

Abstract

Economic theory and empirical evidence consistently demonstrate that entrepreneurship––via innovation––is positively linked with a country’s productivity, and consequently, economic performance. Economic performance, in turn, is closely linked with the standard of living enjoyed by nation’s population. Historically, the United States has been a key contributor to this. Following the Second World War, the US maintained the highest level of entrepreneurial activity. However, beginning in the late 1970s, entrepreneurship has been declining in the United States, and this had led many to speculate the worst. Interestingly, no research has yet addressed the causes for this decline. The goal of this research project is to fill the literature gap and address the underlying cause of the phenomenon.