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Fewer Feel Need to Start Own Business as Job Market Recovers

Signs of recovery
Fewer Americans apparently felt the need to create their own jobs last year, suggesting the economy is improving. Kauffman Foundation

The rate at which Americans are starting new businesses declined last year to pre-recession levels, according to annual figures released Wednesday.

The findings from the Kauffman Foundation, which studies entrepreneurship, suggest more individuals are landing jobs and not opting to start businesses out of necessity — a group referred to as necessity entrepreneurs. The business-creation rate declined to 0.28 percent in 2013 — a level not seen since before the Great Recession. In other words, business creation dipped to 280 out of 100,000 adults last year. The last time the rate was below 0.28 percent was in 2001, when it was 0.26 percent.

"People are being attracted back into the labor market," said Dane Stangler, the foundation's vice president of research and policy. Plus, those who are starting businesses are employed and taking the start-up plunge out of perceived opportunities. "They're not doing it because they were forced into it."