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Regional unemployment, self-employment and family background

  • Hannu Tervo

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.

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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 38 (2006)
Issue (Month): 9 ()
Pages: 1055-1062

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Handle: RePEc:taf:applec:v:38:y:2006:i:9:p:1055-1062
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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. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, October.
  3. Carrasco, R., 1997. "Transitions to and from Self-Employment in Spain: An Empirical Analysis," Papers 9710, Centro de Estudios Monetarios Y Financieros-.
  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 Niittykangas & Hannu Tervo, 2005. "Spatial variations in intergenerational transmission of self-employment," Regional Studies, Taylor & Francis Journals, vol. 39(3), pages 319-332.
  6. Hannu Tervo, 2004. "Self-employment dynamics in rural and urban labour markets," ERSA conference papers ersa04p396, European Regional Science Association.
  7. Ritsila, Jari & Tervo, Hannu, 2002. " Effects of Unemployment on New Firm Formation: Micro-level Panel Data Evidence from Finland," Small Business Economics, Springer, vol. 19(1), pages 31-40, August.
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