From Population Growth to Firm Demographics: Implications for Concentration, Entrepreneurship and the Labor Share

In the U.S., large firms now account for a greater share of economic activity, new are being created at slower rates, and workers receiving smaller GDP. Changes in population growth provide unified quantitative explanation. A decrease lowers firm entry shifting firm‐age distribution toward older firms. Firm aging accounts (i) concentration employment firms, (ii) trends average size exit key determinants rates. Feedback effects from demographics generate two‐thirds effect. Prior to decrease, rates rose steadily reflecting earlier baby boom. The glut due boom lead rich transitional dynamics within feedback effects, accounting more than half total change. Baby induced changes driving force post‐WWII rise fall aggregate labor share. Ignoring attributes all long run decline which reality have been only one‐third as large.