Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recession

We study entry into entrepreneurship during the COVID-19 recession of 2020 using new data from an extensive survey of more than 24,000 Spanish households, conducted between June and November 2020. We find that while the overall decline in the startup rate in 2020 was large, and of a similar magnitud...

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Autores: Albert, Christoph, 1988-, Caggese, Andrea, González López-Valcárcel, Beatriz, Martin-Sanchez, Victor
Tipo de recurso: artículo
Estado:Versión publicada
Fecha de publicación:2023
País:España
Institución:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
Repositorio:Recercat. Dipósit de la Recerca de Catalunya
OAI Identifier:oai:recercat.cat:10230/57470
Acceso en línea:http://hdl.handle.net/10230/57470
http://dx.doi.org/10.1016/j.jbankfin.2023.106779
Access Level:acceso abierto
Palabra clave:Recessions
Financial crisis
Entrepreneurship
Firm dynamics
Coronavirus
COVID-19
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spelling Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recessionAlbert, Christoph, 1988-Caggese, AndreaGonzález López-Valcárcel, BeatrizMartin-Sanchez, VictorRecessionsFinancial crisisEntrepreneurshipFirm dynamicsCoronavirusCOVID-19We study entry into entrepreneurship during the COVID-19 recession of 2020 using new data from an extensive survey of more than 24,000 Spanish households, conducted between June and November 2020. We find that while the overall decline in the startup rate in 2020 was large, and of a similar magnitude as that during the Great Recession, the differential impact depending on ex ante income was starkly different. During 2020, the drop in firm entry was entirely concentrated among low- and medium-income households. We show that the entrepreneurship gap between these households and their high-income counterparts is not directly explained by social distancing, since it is mostly driven by the sectors not directly affected by lockdown measures, and it is larger among households that did not suffer a negative income shock during the pandemic. Our results instead indicate that high-income households performed relatively better during the COVID-19 recession because they had the means to exploit new business opportunities, thanks to their larger wealth and better access to external finance.The views expressed in this paper are those of the authors and do not necessarily represent the views of Banco de España or the Eurosystem. Andrea Caggese acknowledges financing from the Plan Estatal de Investigación Científica y Técnica y de Innovación 2017–2020, project number PID2020-116268GB-I00, and from the Spanish Agencia Estatal de Investigación (AEI), through the Severo Ochoa Programme for Centres of Excellence in R&D (Barcelona School of Economics CEX2019-00915-S).Elsevier202320232023info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionapplication/pdfapplication/pdfhttp://hdl.handle.net/10230/57470http://dx.doi.org/10.1016/j.jbankfin.2023.106779reponame:Recercat. Dipósit de la Recerca de Catalunyainstname:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)InglésJournal of Banking & Finance. 2023;149:106779.info:eu-repo/grantAgreement/ES/2PE/PID2020-116268GB-I00info:eu-repo/grantAgreement/ES/2PE/CEX2019-00915-S© 2023 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccessoai:recercat.cat:10230/574702026-05-29T05:05:01Z
dc.title.none.fl_str_mv Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recession
title Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recession
spellingShingle Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recession
Albert, Christoph, 1988-
Recessions
Financial crisis
Entrepreneurship
Firm dynamics
Coronavirus
COVID-19
title_short Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recession
title_full Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recession
title_fullStr Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recession
title_full_unstemmed Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recession
title_sort Income inequality and entrepreneurship: lessons from the 2020 COVID-19 recession
dc.creator.none.fl_str_mv Albert, Christoph, 1988-
Caggese, Andrea
González López-Valcárcel, Beatriz
Martin-Sanchez, Victor
author Albert, Christoph, 1988-
author_facet Albert, Christoph, 1988-
Caggese, Andrea
González López-Valcárcel, Beatriz
Martin-Sanchez, Victor
author_role author
author2 Caggese, Andrea
González López-Valcárcel, Beatriz
Martin-Sanchez, Victor
author2_role author
author
author
dc.subject.none.fl_str_mv Recessions
Financial crisis
Entrepreneurship
Firm dynamics
Coronavirus
COVID-19
topic Recessions
Financial crisis
Entrepreneurship
Firm dynamics
Coronavirus
COVID-19
description We study entry into entrepreneurship during the COVID-19 recession of 2020 using new data from an extensive survey of more than 24,000 Spanish households, conducted between June and November 2020. We find that while the overall decline in the startup rate in 2020 was large, and of a similar magnitude as that during the Great Recession, the differential impact depending on ex ante income was starkly different. During 2020, the drop in firm entry was entirely concentrated among low- and medium-income households. We show that the entrepreneurship gap between these households and their high-income counterparts is not directly explained by social distancing, since it is mostly driven by the sectors not directly affected by lockdown measures, and it is larger among households that did not suffer a negative income shock during the pandemic. Our results instead indicate that high-income households performed relatively better during the COVID-19 recession because they had the means to exploit new business opportunities, thanks to their larger wealth and better access to external finance.
publishDate 2023
dc.date.none.fl_str_mv 2023
2023
2023
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/10230/57470
http://dx.doi.org/10.1016/j.jbankfin.2023.106779
url http://hdl.handle.net/10230/57470
http://dx.doi.org/10.1016/j.jbankfin.2023.106779
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Journal of Banking & Finance. 2023;149:106779.
info:eu-repo/grantAgreement/ES/2PE/PID2020-116268GB-I00
info:eu-repo/grantAgreement/ES/2PE/CEX2019-00915-S
dc.rights.none.fl_str_mv http://creativecommons.org/licenses/by-nc-nd/4.0/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv http://creativecommons.org/licenses/by-nc-nd/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
application/pdf
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv reponame:Recercat. Dipósit de la Recerca de Catalunya
instname:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
instname_str Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
reponame_str Recercat. Dipósit de la Recerca de Catalunya
collection Recercat. Dipósit de la Recerca de Catalunya
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