Young Workers Are Choosing Startups Over Jobs. New Revelio Labs Research Shows an Entrepreneurship Shift
A new study from Revelio Labs suggests the U.S. labor market may be entering an entrepreneurship era, particularly for younger workers. As hiring slows and traditional entry level opportunities become harder to secure, more Americans are choosing to start their own businesses instead of continuing a prolonged job search.
In a November 18, 2025 report, economist Ege Aksu analyzes worker level labor market data and finds that transitions into entrepreneurship have reached their highest levels in seven years. The share of job switchers moving into self employment or founding roles has nearly doubled since its post pandemic low, rising from about 0.44 percent in early 2022 to 0.85 percent by early 2025.
The increase coincides with a cooling labor market. Hiring rates and labor demand have fallen steadily over the past two years, particularly for early career roles. As employers grow more cautious, workers appear to be responding by creating their own opportunities. Revelio Labs finds a clear inverse relationship between labor market strength and entrepreneurship. When hiring slows, entrepreneurship rises.
This shift is not limited to experienced workers. New labor market entrants are increasingly choosing entrepreneurship as their first step after school. The data show that entrepreneurship among first job workers spikes during periods of uncertainty, including the pandemic in 2020, the white collar slowdown of 2022 and 2023, and the more recent cooling in 2024 and 2025. For many young workers, the lack of outside options lowers the opportunity cost of starting a venture.
The demographics of entrepreneurship are also changing. The average age of workers moving into entrepreneurship has fallen sharply and is now below 34, the lowest level in several years. Entrepreneurship is no longer primarily a mid career pivot. It is increasingly an early career decision, with younger workers choosing risk and independence earlier rather than waiting for stable employment.
Education patterns reveal an even sharper divide. Entrepreneurship has risen most strongly among workers without college degrees. High school graduates saw the largest increase in entrepreneurship rates compared with 2023, while bachelor’s, associate, and graduate degree holders experienced smaller gains. For workers with fewer formal credentials, declining access to traditional hiring channels appears to be pushing more people toward self employment as an alternative path.
At the same time, the rise among graduate degree holders points to a different dynamic. Highly skilled professionals, particularly in tech adjacent fields, are launching independent practices and startups as new tools, including AI, reshape how professional work can be delivered.
Despite the assumption that early ventures are short lived, the data suggest otherwise. Revelio Labs finds that more than two thirds of first job entrepreneurs remain with their venture for over three years, and fewer than seven percent exit within the first year. This persistence indicates that early career entrepreneurship is not just a temporary response to a weak job market. It is becoming a durable career strategy.
Industry patterns reinforce this view. Technology stands out as the dominant landing industry for first job entrepreneurs, accounting for more than 18 percent of new founders. Low startup costs, transferable skills, remote work, and the rapid spread of AI tools have made it easier to launch software driven or project based businesses. Other common destinations include marketing, public sector management, digital commerce, human resources services, and finance.
Taken together, the findings point to a structural shift in how younger workers view their careers. Autonomy and flexibility are increasingly valued alongside income and stability. In a labor market where early career hiring is softer and wage growth is uneven, building something independently is becoming a rational and appealing choice.
For employers, the implications are significant. Companies are no longer competing only with other firms for talent. They are competing with entrepreneurship itself. As the rise of the first job founder accelerates, jobs that fail to offer growth, meaning, and flexibility may struggle to attract and retain the next generation of workers.
