58 Pages Posted: 7 Apr 2021 Last revised: 26 Jul 2021
Date Written: July 5, 2021
Republicans start more firms than Democrats. Using a sample of 27 million party-identified Americans between 1997 and 2017, we find that 8% of Republicans and 5% of Democrats become entrepreneurs. This partisan entrepreneurship gap is time-varying: Republicans increase their relative entrepreneurship during Republican administrations and decrease it during Democratic administrations, amounting to a partisan reallocation of 340,000 new firms over our 21 year sample. We find sharp changes in partisan entrepreneurship around the elections of President Obama and President Trump, and the strongest effects among the most politically active partisans: those that donate and vote.
Keywords: Entrepreneurship, Politics, Partisanship
JEL Classification: G12, G14
Suggested Citation: Suggested Citation