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Social security arrangements and early-stage entrepreneurial activity

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Author Info

  • André van Stel
  • Peter Brouwer
  • Sander Wennekers
  • Jolanda Hessels

Abstract

This exploratory study defines a number of propositions regarding the relation between social security arrangements and the rate of early-stage entrepreneurial activity at the country level. We state that in investigating this relation it may be relevant to distinguish between social security contributions paid by employers and employees, and to look at micro-based indicators (replacement rates) for the benefits an individual is entitled to in case of unemployment and illness. Furthermore, we state that it may be especially relevant to focus on the social security position of self-employed relative to the social security position of employees. Using a sample of countries participating in the Global Entrepreneurship Monitor, we explore how various measures of entrepreneurial activity are related to various measures of social security arrangements. Our analysis using aggregate indicators shows that the height of employer social security contributions negatively influences entrepreneurial activity at the macro level, but that the height of employee contributions has no impact. The results of our analysis using micro-level based indicators suggest that the replacement rate of employees has a significantly negative influence on the level of early-stage entrepreneurship at the macro level.

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Bibliographic Info

Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H200708.

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Length: 32 pages
Date of creation: 10 Sep 2007
Date of revision:
Handle: RePEc:eim:papers:h200708

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Cited by:
  1. André van Stel & Sander Wennekers & Jolanda Hessels & Chantal Hartog, 2011. "Global Entrepreneurship Monitor 2010 The Netherlands," Scales Research Reports A201108, EIM Business and Policy Research.
  2. Koellinger, Ph.D. & Minniti, M., 2008. "Unemployment Benefits Crowd Out Nascent Entrepreneurial Activity," ERIM Report Series Research in Management ERS-2008-012-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
  3. Concepción Román & Emilio Congregado & José Millán, 2011. "Dependent self-employment as a way to evade employment protection legislation," Small Business Economics, Springer, vol. 37(3), pages 363-392, October.
  4. Sander Wennekers & Jolanda Hessels & Chantal Hartog, 2009. "Global Entrepreneurship Monitor 2008 The Netherlands," Scales Research Reports A200914, EIM Business and Policy Research.
  5. André van Stel & Sander Wennekers & Jolanda Hessels & Peter van der Zwan, 2012. "Global Entrepreneurship Monitor 2011 The Netherlands," Scales Research Reports A201211, EIM Business and Policy Research.
  6. Jolanda Hessels & Marco Gelderen & Roy Thurik, 2008. "Entrepreneurial aspirations, motivations, and their drivers," Small Business Economics, Springer, vol. 31(3), pages 323-339, October.
  7. Thai, Mai Thi Thanh & Turkina, Ekaterina, 2014. "Macro-level determinants of formal entrepreneurship versus informal entrepreneurship," Journal of Business Venturing, Elsevier, vol. 29(4), pages 490-510.

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