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Regional unemployment, self-employment and family background

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  • Hannu Tervo

Abstract

This paper analyses the role of regional unemployment on self-employment. The paper argues that family background separates individuals with respect to the effect of unemployment. The empirical analysis is based on data on a sample of Finnish residents aged 0-14 years in 1970 whose subsequent employment is examined. The results show that high unemployment in a region pushes individuals from self-employed families into self-employment, while it has the opposite effect on individuals from wage earner families. The push effect seems to work only among those individuals who already have entrepreneurial skills through their family background.

Suggested Citation

  • Hannu Tervo, 2006. "Regional unemployment, self-employment and family background," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 1055-1062.
  • Handle: RePEc:taf:applec:v:38:y:2006:i:9:p:1055-1062 DOI: 10.1080/00036840500400053
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    References listed on IDEAS

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    1. Martinez-Granado, Maite, 2002. "Self-Employment and Labour Market Transitions: A Multiple State Model," CEPR Discussion Papers 3661, C.E.P.R. Discussion Papers.
    2. Carrasco, Raquel, 1999. " Transitions to and from Self-employment in Spain: An Empirical Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 315-341, August.
    3. Hannu Niittykangas & Hannu Tervo, 2005. "Spatial variations in intergenerational transmission of self-employment," Regional Studies, Taylor & Francis Journals, vol. 39(3), pages 319-332.
    4. R T Hamilton, 1989. "Unemployment and Business Formation Rates: Reconciling Time-Series and Cross-Section Evidence," Environment and Planning A, , vol. 21(2), pages 249-255, February.
    5. Hannu Tervo, 2004. "Self-employment dynamics in rural and urban labour markets," ERSA conference papers ersa04p396, European Regional Science Association.
    6. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, March.
    7. Ritsila, Jari & Tervo, Hannu, 2002. "Effects of Unemployment on New Firm Formation: Micro-level Panel Data Evidence from Finland," Small Business Economics, Springer, pages 31-40.
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    Cited by:

    1. Neațu Alina-Maria & Imbrișcă Cosmin-Ionuț, 2015. "Entrepreneursiph In Romania. A Behavioral Economics Perspective," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 95-105, July.
    2. Marco Caliendo & Jens Hogenacker & Steffen Künn & Frank Wießner, 2015. "Subsidized start-ups out of unemployment: a comparison to regular business start-ups," Small Business Economics, Springer, vol. 45(1), pages 165-190, June.
    3. Minniti, Maria & Lévesque, Moren, 2008. "Recent developments in the economics of entrepreneurship," Journal of Business Venturing, Elsevier, vol. 23(6), pages 603-612, November.
    4. Gema Álvarez & Carlos Gradín & Mª Soledad Otero, 2013. "Self-Employment: Transition And Earnings Differential," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 21(2), pages 61-90, Autumn.
    5. Lindquist, Matthew J. & Sol, Joeri & van Praag, Mirjam C. & Vladasel, Theodor, 2016. "On the Origins of Entrepreneurship: Evidence from Sibling Correlations," IZA Discussion Papers 10278, Institute for the Study of Labor (IZA).
    6. Zhang, Ying & Duysters, Geert, 2010. "Entrepreneurship Development and the Role of Economic Transition in Entrepreneurial Activities in China," MERIT Working Papers 036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Walter, Sascha G. & Block, Jörn H., 2016. "Outcomes of entrepreneurship education: An institutional perspective," Journal of Business Venturing, Elsevier, vol. 31(2), pages 216-233.
    8. K. Parboteeah & Sascha Walter & Jörn Block, 2015. "When Does Christian Religion Matter for Entrepreneurial Activity? The Contingent Effect of a Country’s Investments into Knowledge," Journal of Business Ethics, Springer, vol. 130(2), pages 447-465, August.
    9. Qingfang Wang, 2009. "Gender, ethnicity, and self-employment: a multilevel analysis across US metropolitan areas," Environment and Planning A, Pion Ltd, London, vol. 41(8), pages 1979-1996, August.
    10. Hannu Tervo, 2014. "Who turns to entrepreneurship later in life? - Push and pull in Finnish rural and urban areas," ERSA conference papers ersa14p236, European Regional Science Association.
    11. Heinrichs, Simon & Walter, Sascha, 2013. "Who Becomes an Entrepreneur? A 30-Years-Review of Individual-Level Research and an Agenda for Future Research," EconStor Preprints 68590, ZBW - German National Library of Economics.
    12. Henley, Andrew, 2015. "The Post Crisis Growth in the Self-Employed: Volunteers or Reluctant Recruits?," IZA Discussion Papers 9232, Institute for the Study of Labor (IZA).
    13. Helena Svaleryd, 2015. "Self-employment and the local business cycle," Small Business Economics, Springer, pages 55-70.
    14. Maidana, Marcos Ignacio, 2016. "Los emprendedores tecnológicos: factores motivacionales," Nülan. Deposited Documents 2500, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    15. Faria, João Ricardo & Cuestas, Juan Carlos & Mourelle, Estefanía, 2010. "Entrepreneurship and unemployment: A nonlinear bidirectional causality?," Economic Modelling, Elsevier, vol. 27(5), pages 1282-1291, September.
    16. Hannu Tervo & Mika Haapanen, 2006. "Gender Differences in Self-Employment in Finnish Regions," ERSA conference papers ersa06p380, European Regional Science Association.
    17. Marco Caliendo & Steffen Künn, 2014. "Regional Effect Heterogeneity of Start-up Subsidies for the Unemployed," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 1108-1134, June.
    18. Fritsch, Michael & Kritikos, Alexander S. & Pijnenburg, Katharina, 2013. "Business Cycles, Unemployment and Entrepreneurial Entry: Evidence from Germany," IZA Discussion Papers 7852, Institute for the Study of Labor (IZA).
    19. Walter, Sascha G. & Dohse, Dirk, 2009. "The interplay between entrepreneurship education and regional knowledge potential in forming entrepreneurial intentions," Kiel Working Papers 1549, Kiel Institute for the World Economy (IfW).
    20. Jose G. Vargas-Hernandez, 2013. "Strategies For Creating New Business, A Sociocultural And Institutional Approach," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 8(1), pages 81-90, March.
    21. Gema Álvarez & Carlos Gradín & M. Soledad Otero, 2009. "Self-employment in Spain: Transition and earnings differential," Working Papers 0907, Universidade de Vigo, Departamento de Economía Aplicada.

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