Research: In Recessions, Employees Avoid Jobs with Startups.

The article focuses on how recessions affect startups' ability to attract talent, revealing that job seekers exhibit increased risk aversion during economic downturns and prefer employment at larger, established firms over startups. Using data from AngelList Talent during the Covid-19 recession, the research shows a significant decline in applications to startups, especially from highly qualified candidates, which exacerbates startups' challenges beyond financial constraints. This "flight to safety" occurs broadly across startups regardless of their success level, indicating a general rise in risk aversion rather than a reassessment of individual firms' risk. The findings suggest that policy responses to support startups during recessions should address not only financial issues but also the critical talent shortage startups face.