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Social security arrangements and early-stage entrepreneurial activity; an empirical analysis

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Author Info

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

Abstract

This exploratory study focuses on the relation between social security arrangements and the rate of early-stage entrepreneurial activity at the country level. 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. On the one hand we look at aggregate indicators such as the social security contributions or premiums paid by employers and employees. On the other hand we look at micro level based indicators such as 'replacement rates', measuring the benefits an individual is entitled to in case of unemployment or illness/disability. Our analysis using aggregate indicators shows that the height of employer premiums negatively influences entrepreneurial activity at the macro level, but that the height of employee premiums 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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File URL: http://www.entrepreneurship-sme.eu/pdf-ez/N200518.pdf
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Bibliographic Info

Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number N200518.

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Length: 30 pages
Date of creation: 26 Jan 2006
Date of revision:
Handle: RePEc:eim:papers:n200518

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