More than 1 million formerly self-employed Americans are no longer in business almost four years after the last recession began, Bloomberg reported.

The 18-month contraction that started in December 2007 initially resulted in more business owners, as the number of people who work for themselves grew to 16.3 million in July 2008 from 15.7 million at the end of 2007, according to data from the U.S. Bureau of Labor Statistics. Since then, the total has fallen about 10 percent to 14.7 million in July.

Employer businesses, defined as those that provide work for individuals including the founder, “have been starting in fewer numbers, with fewer workers and growing at a slower pace than in the past,” said Robert Litan, vice president of the Kauffman Foundation, in an interview with Bloomberg. “Therefore, these entrepreneurs are generating increasingly fewer new jobs for the U.S. labor market.”

The number of new employer businesses dropped 24 percent to 505,473 on an annual basis in 2010, from 667,341 in 2006, Litan said.

Small companies employ about half of the private-sector labor force, so it’s “very difficult” for the jobless rate to improve when they’re “not doing well, because they are too big a part of the economy,” said Scott Shane, a professor of entrepreneurial studies at Case Western Reserve University.

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