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Is Starting a Business a Sustainable way out of Unemployment? Treatment Effects of the Swedish Start-up Subsidy

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  • L. Behrenz

    (Linnaeus University)

  • L. Delander

    (Linnaeus University)

  • J. Månsson

    (Linnaeus University)

Abstract

In this paper, we evaluate the Swedish self-employment start-up program based on a matching approach using data from administrative records. In addition to information of labor market history, traditional human capital and socio-economic variables, the data at hand also include information on the self-employment history of participants and nonparticipants as well as that of their parents. Our results indicate that the start-up subsidy program for unemployed persons is a successful program regarding the integration of the unemployed into the mainstream of the labor market. We find that, relative to members of control groups, participants, on average, have an increased probability of unsubsidized employment. Our analysis of different educational backgrounds presents the strongest employment effects for the low educated unemployed.

Suggested Citation

  • L. Behrenz & L. Delander & J. Månsson, 2016. "Is Starting a Business a Sustainable way out of Unemployment? Treatment Effects of the Swedish Start-up Subsidy," Journal of Labor Research, Springer, vol. 37(4), pages 389-411, December.
    • Handle: RePEc:spr:jlabre:v:37:y:2016:i:4:d:10.1007_s12122-016-9233-4
    DOI: 10.1007/s12122-016-9233-4
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    Cited by:

    1. Huňady Ján & Pisár Peter & Hiadlovský Vladimír & Šipikal Miroslav, 2022. "One-way ticket from unemployment to entrepreneurship? Evaluation of allowance for self-employment in least developed regions," Central European Journal of Public Policy, Sciendo, vol. 16(2), pages 1-17, December.
    2. Lutz Bellmann & Marco Caliendo & Stefan Tübbicke, 2018. "The Post‐Reform Effectiveness of the New German Start‐Up Subsidy for the Unemployed," LABOUR, CEIS, vol. 32(3), pages 293-319, September.
    3. Marco Caliendo & Stefan Tübbicke, 2020. "New evidence on long-term effects of start-up subsidies: matching estimates and their robustness," Empirical Economics, Springer, vol. 59(4), pages 1605-1631, October.
    4. Adela Luque & Maggie R. Jones, 2019. "Differences in Self-Employment Duration by Year of Entry & Pre-Entry Wage-Sector Attachment," Journal of Labor Research, Springer, vol. 40(1), pages 24-57, March.
    5. Ignacio Moral-Arce & Javier Martín-Román & Ángel L. Martín-Román, 2019. "Cessation of Activity Benefit for Spanish Self-employed Workers: A Heterogeneous Impact Evaluation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 231(4), pages 41-79, December.
    6. Caliendo, Marco & Tübbicke, Stefan, 2021. "Design and effectiveness of start-up subsidies: Evidence from a policy reform in Germany," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 333-340.
    7. Caliendo, Marco & Tübbicke, Stefan, 2019. "Do Start-Up Subsidies for the Unemployed Affect Participants' Well-Being? A Rigorous Look at (Un-)Intended Consequences of Labor Market Policies," IZA Discussion Papers 12755, Institute of Labor Economics (IZA).
    8. Caliendo, Marco & Künn, Steffen & Weissenberger, Martin, 2020. "Catching up or lagging behind? The long-term business and innovation potential of subsidized start-ups out of unemployment," Research Policy, Elsevier, vol. 49(10).
    9. Alic BÎRCA, 2023. "Workforce Participation in Active Labour Market Policies: A Comparative Analysis in EU Member States," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 24(2), pages 173-187, May.

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    More about this item

    Keywords

    Start-up subsidies; Self-employment; Direct employment effects;
    All these keywords.

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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