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

Author

Listed:
  • 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.

Suggested Citation

  • André van Stel & Peter Brouwer & Sander Wennekers & Jolanda Hessels, 2006. "Social security arrangements and early-stage entrepreneurial activity; an empirical analysis," Scales Research Reports N200518, EIM Business and Policy Research.
    • Handle: RePEc:eim:papers:n200518
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    File URL: http://www.entrepreneurship-sme.eu/pdf-ez/N200518.pdf
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    Cited by:

    1. Sander Wennekers & Roy Thurik & André Stel & Niels Noorderhaven, 2010. "Uncertainty Avoidance and the Rate of Business Ownership Across 21 OECD Countries, 1976–2004," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 271-299, Springer.
    2. Henrekson, Magnus, 2007. "Entrepreneurship and Institutions," Working Paper Series 707, Research Institute of Industrial Economics.

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