What’s driving America’s drop in entrepreneurial activity?

by Ryan Streeter on October 21, 2014. Follow Ryan on Twitter.

I’ve written about this trend before:

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This interview by Jim Pethokoukis with Ian Hathaway on this trend is interesting.

Young firms are declining as a share of the total number of firms. We’ve covered this before and previously linked to Hathaway’s recent article with Bob Litan on this.

One thing to draw attention to, though, are Hathaway’s non-policy speculations about why this is so (he also suggests that regulatory and education policy are important factors in all this). He says:

One explanation, which isn’t very exciting, is just that we experienced high growth, population growth in certain regions, businesses needed to be formed to meet that local demand and after that growth slowed down, the firm entry rates maybe came down with it.

Another explanation has to deal with business consolidation. So economic theory would say that the more consolidated an industry is, the higher the barriers are to firm entry.  There may be a connection there; others have talked about this.  It’s something that we’ve seen in a number of sectors.  I have some more research coming out in the coming weeks and months that will address that issue as well.

Whatever the case, the numbers don’t lie. Here are some charts to a recent Haltiwanger et. al. paper that Pethokoukis also links to:

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A lot of this trend appears to be driven by loss of startup activity in retail and services:

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College bubble update: More students – especially among affluent families – take on debt

by Ryan Streeter on October 9, 2014. Follow Ryan on Twitter.

This Pew study is interesting. It shows that even in the wake of the college bubble, college debt continues to increase. The problem has grown especially fast among the wealthier student population.

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The fastest-growing 25 cities since the recession

by Ryan Streeter on October 9, 2014. Follow Ryan on Twitter.

Geographically, the recovery has been concentrated in a relative handful of regions. Nationwide, real per capita GDP rose a meager 3.8% from 2010 through 2013…[A] handful of metropolitan areas have enjoyed much faster growth. For the most part, these are areas that have cashed in on the current technology or energy booms, and in some cases, both. Also, surprisingly, there have been some very good gains in some of the nation’s long-distressed industrial heartland metro areas, as the combination of energy development and a resurgent automobile industry have boosted regional GDP.

That’s Joel Kotkin in his latest Forbes piece. Here’s the top 25 fastest-growing cities since the recession ended:

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European demography, economy, and identity…and neo-druid communitarianism

by Ryan Streeter on September 28, 2014. Follow Ryan on Twitter.

This is the best line I’ve read this week: “Outside of some vaguely anti-American, neo-druid communitarianism among some, there’s not much holding Europeans together.”

That’s Joel Kotkin on Europe’s woes in his latest Forbes article.

He makes that point after citing familiar demographic and economic sources of Europe’s problems, such as this:

Europe’s poor economy stems in large part from policy. The strong welfare state so admired by progressives here has also made Europe a very expensive place to do business. High taxes and welfare costs, long tolerable in an efficient economy like Germany, have a way of catching up with companies and countries. This has been particularly notable after the financial crisis; since 2008 the unemployment rate has shot up 5 percentage points while dropping steadily in the Untied States.

But, Kotkin speculates, maybe it’s not just demography and economy that is holding Europe back.

Perhaps the greatest challenge to Europe is not demographics, economics or energy, but one of identity.

On the multi-lingual, multi-cultural continent that is Europe, Kotkin notes, that identity used to be rooted in a common faith. Now that Europe is highly secularized, is there any such thing as a “European identity”? Kotkin thinks not, and believes this is the source of the separatism we see in Europe right now.

It’s an interesting question.

Are there poverty traps or not?

by Ryan Streeter on September 27, 2014. Follow Ryan on Twitter.

That’s an interesting question posed by this Economist blog post.  The author, keying off this paper by World Bank economists saying that poverty traps are overblown (contra the arguments made, for instance, by Paul Collier’s popular book The Bottom Billion), says that the answer isn’t clear.

The answer to the question will essentially explain how to square this chart….

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…with this one:

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by Ryan Streeter on September 25, 2014. Follow Ryan on Twitter.

Not sure if anyone really uses that word in Germany, but it’s what comes to mind while looking at the exceptional level of satisfaction Germans have about their economy compared to other developed nations, via Pew.

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Falling marriage rates and employability of men

by Ryan Streeter on September 25, 2014. Follow Ryan on Twitter.

After decades of declining marriage rates and changes in family structure, the share of American adults who have never been married is at an historic high. In 2012, one-in-five adults ages 25 and older (about 42 million people) had never been married.

That’s from a Pew survey released yesterday. Here are the trend lines:

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The survey also shows that 78% of never-married women say “a steady job” is very important when considering a potential spouse. The falling labor force participation rate of young men is thus tied up with the falling marriage rate:

Among never-married adults ages 25 to 34, the number of employed men per 100 women dropped from 139 in 1960 to 91 in 2012, despite the fact that men in this age group outnumber young women in absolute numbers. In other words, if all never-married young women in 2012 wanted to find a young employed man who had also never been married, 9% of them would fail, simply because there are not enough men in the target group. Five decades ago, never-married young women had a much larger pool of potential spouses from which to choose.

Kid centers: Austin TX and Las Vegas NV are among the top kid-friendly cities in America

by Ryan Streeter on September 15, 2014. Follow Ryan on Twitter.

I’ve long thought a good indicator of a city’s well-being is the share of children who live there. I’ve even applied that thought to both sides of the Atlantic. Joel Kotkin and Wendell Cox have ranked America’s largest 52 metro areas by how much they have grown their youth population.

One might not think that Austin, the epicenter of new-tech and music and food, would appeal to people with kids, but it’s #2 on the list. And, perhaps more surprising, Sin City is #3.

The well-worth-your-while read is here, and the top ten are as follows:

No. 1: Raleigh, N.C. MSA

Rise In No. Of Children Aged 5-14, 2000-13: 55.7%

No. Of Children Aged 5-14, 2013: 177,886

Percentage Of Children Aged 5-14 In Total Population, 2013: 14.6%

No. 2: Austin, Texas

Rise In No. Of Children Aged 5-14, 2000-13: 49.3%

No. Of Children Aged 5-14, 2013: 261,199

Percentage Of Children Aged 5-14 In Total Population, 2013: 13.9%

No. 3: Las Vegas

Rise In No. Of Children Aged 5-14, 2000-13: 39.0%

No. Of Children Aged 5-14, 2013: 275,663

Percentage Of Children Aged 5-14 In Total Population, 2013: 13.6%

No. 4: Charlotte, N.C.

Rise In No. Of Children, 2000-13: 32.9%

No. Of Children, 2013: 331,956

Percentage Of Children In Total Population, 2013: 14.2%

No. 5: Phoenix, Ariz.

Rise In No. Of Children, 2000-13: 29.3%

No. Of Children, 2013: 633,123

Percentage Of Children In Total Population, 2013: 14.4%

No. 6: Dallas-Ft. Worth, Texas

Rise In No. Of Children, 2000-13: 28.2%

No. Of Children, 2013: 1.05 million

Percentage Of Children In Total Population, 2013: 15.4%

No. 7: Atlanta, Ga.

Rise In No. Of Children, 2000-13: 26.1%

No. Of Children, 2013: 808,811

Percentage Of Children In Total Population, 2013: 14.6%

No. 8: Houston, Texas

Rise In No. Of Children, 2000-13: 25.8%

No. Of Children, 2013: 965,259

Percentage Of Children In Total Population, 2013: 15.3%

No. 9: Nashville, Tenn.

Rise In No. Of Children, 2000-13: 22.7%

No. Of Children, 2013: 237,119

Percentage Of Children In Total Population, 2013: 13.5%

No. 10: Orlando, Fla.

Rise In No. Of Children, 2000-13: 22.6%

No. Of Children, 2013: 288,091

Percentage Of Children In Total Population, 2013: 12.7%

College bubble update: On the positive effects of career and technical education

by Ryan Streeter on September 7, 2014. Follow Ryan on Twitter.

Here’s another interesting reference in the study I cited in my last post. It shows the positive relationship between CTE and earnings and family formation. This subject, in my view, receives far too little attention from policymakers.

A recent randomized evaluation of Career Academies—a career- oriented high school program that provides small learning communities, emphasis on career paths, and internship opportunities for disadvantaged high school students—lends additional credence to the potential causal link between male earnings capacity and marriage rates. Eight years after students graduated from high school, males who participated in Career Academies due to the experiment were earning on average $361 more per month and were employed almost three months more per year than males who were experimentally assigned to traditional high school programs. Equally remarkable were the differences among Career Academy participants and non-participants in measures of family formation: male participants were 33% more likely to be married and living with their spouse, 30% more likely to be living with their partner and children, and 35% more likely to be the custodial parent of their children.

There are promising alternatives to a 4-year college degree for a large number of Americans, but to date, our policies surrounding these programs and opportunities are unclear, uncoordinated, and largely neglected by elected officials.

That’s why, for instance, Mike Pence has been spending so much time on this issue.

Male earnings and employability and marriage: a self-reinforcing downward spiral

by Ryan Streeter on September 7, 2014. Follow Ryan on Twitter.

I was reminded of the Autor-Wasserman “Wayward Sons” study (pdf) when Thomas Edsall referred to it in this column last week. There are some pretty interesting and sobering charts in the study, which I’ll put below with no commentary other than this snippet from the study:

Less-educated males are far less likely than highly-educated males to marry, but they are not less likely to have children. Due to their low marriage rates and low earnings capacity, children of less-educated males face comparatively low odds of living in economically secure households with two parents present. In general, children born into such households face poorer educational and earnings prospects over the long term. Ironically, males born into low-income single-parent headed households—which, in the vast majority of cases are female-headed households—appear to fare particularly poorly on numerous social and educational outcomes. Thus, the poor economic prospects of less-educated males may create differentially large disadvantages for their sons, potentially reinforcing the development of the gender gap in the next generation.

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