Unemployment Insurance and Entrepreneurship
AbstractBased on administrative registers from Norway, we examine how unemployment insurance (UI) and active labor market programs (ALMP) affect the transition rates from unemployment to regular employment and entrepreneurship. We find that the entrepreneurship hazard is highly responsive with respect to UI incentives, and that the probability of starting up a new business increases sharply around the time of UI exhaustion. We also find that while participation in ALMP has a positive impact on the employment hazard, it has no effect on entrepreneurship. We speculate that this reflects the programs' one-sided focus on job search rather than job creation.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7121.
Length: 25 pages
Date of creation: Jan 2013
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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-2013-01-19 (All new papers)
- NEP-ENT-2013-01-19 (Entrepreneurship)
- NEP-IAS-2013-01-19 (Insurance Economics)
- NEP-LAB-2013-01-19 (Labour Economics)
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