With Veterans Day approaching, stories of soldiers' service and courage will abound, but until now, little has been known about their role in one of America's most important fields: entrepreneurship.
A new study released today by the Ewing Marion Kauffman Foundation shows, for the first time, business creation by veteran status at the individual level over the past 16 years.
Until three years ago, U.S. veterans generally started companies at higher rates than non-veterans did. However, the "Kauffman Index of Entrepreneurial Activity by Veteran Status: 1996-2011" shows that veteran entrepreneurship shares have been declining steadily over the past two decades. In 1996, veterans represented 12.3 percent of all new entrepreneurs. By 2011, veterans comprised just 6 percent of new entrepreneurs.
Part of the decline can be attributed to falling veteran entrepreneurship rates compared to rising non-veteran rates. The biggest drop in the veteran share, however, coincides with increasing numbers of veterans aging out of the U.S. working-age population. The share of this population fell from 11.2 percent in 1996 to 6.4 percent in 2011, the study showed.
In 2011, 320 out of 100,000 adults, or 0.32 percent, created new businesses each month, while just 300 veterans out of 100,000 adults started companies.
The study is based on data from the Kauffman Index of Entrepreneurial Activity, which captures new business owners in their first month of significant business activity and provides the earliest documentation of new business development across the country.
The percentage of the adult, non-business owner population that starts a business each month is measured using data from the Current Population Survey. New data extracts for every month of CPS data from 1996 to 2011 were downloaded and compiled to create estimates of entrepreneurship rates by veteran status.