AbstractWe examine the impact of job loss on entrepreneurship behavior in Norway. Our identification strategy relies on the use of mass layoffs caused by bankruptcies as indicators of exogenous displacement. We find that working in a company which is going to close down due to bankruptcy during the next four years raises the subsequent entrepreneur rate by 3.7 percentage points (155 %) for men and 1.8 percentage points (180 %) for women, compared to working in a stable firm. These estimates are much larger than what has previously been reported in the literature. Taking into account that many workers lose their jobs in the comparison group of stable firms also, we reckon that the full effects of displacement are even larger.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5373.
Length: 33 pages
Date of creation: Dec 2010
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Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-03 (All new papers)
- NEP-ENT-2011-01-03 (Entrepreneurship)
- NEP-LAB-2011-01-03 (Labour Economics)
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- Røed, Knut & Skogstrøm, Jens Fredrik, 2013. "Unemployment Insurance and Entrepreneurship," IZA Discussion Papers, Institute for the Study of Labor (IZA) 7121, Institute for the Study of Labor (IZA).
- Poschke, Markus, 2013. "The Decision to Become an Entrepreneur and the Firm Size Distribution: A Unifying Framework for Policy Analysis," IZA Discussion Papers, Institute for the Study of Labor (IZA) 7757, Institute for the Study of Labor (IZA).
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