IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp5373.html

Creative Unemployment

Author

Listed:
  • Røed, Knut

    (Ragnar Frisch Centre for Economic Research)

  • Skogstrøm, Jens Fredrik

    (Ragnar Frisch Centre for Economic Research)

Abstract

We 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.

Suggested Citation

  • Røed, Knut & Skogstrøm, Jens Fredrik, 2010. "Creative Unemployment," IZA Discussion Papers 5373, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp5373
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp5373.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. von Greiff, Jenny, 2009. "Displacement and self-employment entry," Labour Economics, Elsevier, vol. 16(5), pages 556-565, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Poschke, Markus, 2013. "The Decision to Become an Entrepreneur and the Firm Size Distribution: A Unifying Framework for Policy Analysis," IZA Discussion Papers 7757, IZA Network @ LISER.
    2. Knut Røed & Jens Fredrik Skogstrøm, 2014. "Unemployment Insurance and Entrepreneurship," LABOUR, CEIS, vol. 28(4), pages 430-448, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Røed, Knut, 2012. "Active Unemployment Insurance," IZA Policy Papers 41, Institute of Labor Economics (IZA).
    2. Helena Svaleryd, 2015. "Self-employment and the local business cycle," Small Business Economics, Springer, vol. 44(1), pages 55-70, January.
    3. Zohal Hessami & Sebastian Schirner & Clara Wobbe, 2025. "Asylum seekers, new businesses, and job creation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 38(4), pages 1-30, December.
    4. Berglann, Helge & Moen, Espen R. & Røed, Knut & Skogstrøm, Jens Fredrik, 2011. "Entrepreneurship: Origins and returns," Labour Economics, Elsevier, vol. 18(2), pages 180-193, April.
    5. repec:spo:wpmain:info:hdl:2441/3018m4nhj18vvr47bolsnnqeqs is not listed on IDEAS
    6. Sebastian Camarero Garcia & Martin Murmann, 2025. "How unemployment benefit duration shapes startup motivation and growth," Small Business Economics, Springer, vol. 64(4), pages 1565-1600, April.
    7. Kristina Nyström, 2020. "Entrepreneurship after displacement," Small Business Economics, Springer, vol. 54(2), pages 475-494, February.
    8. Baumann, Florian & Brändle, Tobias, 2012. "Self-employment, educational attainment and employment protection legislation," Labour Economics, Elsevier, vol. 19(6), pages 846-859.
    9. Alpaslan Akay & Levent Yilmaz, 2025. "“Status” concerns and self-employment transitions," Small Business Economics, Springer, vol. 65(4), pages 2113-2142, December.
    10. Kristina Nyström, 2018. "Regional resilience to displacements," Regional Studies, Taylor & Francis Journals, vol. 52(1), pages 4-22, January.
    11. Christopher J. Boudreaux & Boris Nikolaev, 2019. "Capital is not enough: opportunity entrepreneurship and formal institutions," Small Business Economics, Springer, vol. 53(3), pages 709-738, October.
    12. Failla, Virgilio & Melillo, Francesca & Reichstein, Toke, 2017. "Entrepreneurship and employment stability — Job matching, labour market value, and personal commitment," Journal of Business Venturing, Elsevier, vol. 32(2), pages 162-177.
    13. repec:spo:wpmain:info:hdl:2441/417l64npmp86ub068rsa2s16rt is not listed on IDEAS
    14. Richard Upward & Peter Wright, 2015. "Don’t Look Down: New Evidence on Job Loss in a Flexible Labour Market," Discussion Papers 2015-10, University of Nottingham, GEP.
    15. Silva, Cinthya & Pino, Gabriel, 2024. "Financial inclusion and roof quality: Satellite evidence from Chilean slums," World Development, Elsevier, vol. 180(C).
    16. Nyström, Kristina, 2016. "Regional resilience to displacement: Evidence from Panel and Quantile regressions," Ratio Working Papers 276, The Ratio Institute.
    17. Egger, Hartmut & Kreickemeier, Udo & Moser, Christoph & Wrona, Jens, 2024. "Offshoring and job polarisation between firms," Journal of International Economics, Elsevier, vol. 148(C).
    18. Schwerdt, Guido, 2011. "Labor turnover before plant closure: "Leaving the sinking ship" vs. "Captain throwing ballast overboard"," Labour Economics, Elsevier, vol. 18(1), pages 93-101, January.
    19. Knut Røed, 2012. "Active social insurance," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-22, December.
    20. George Saridakis & Anne-Marie Mohammed & Jesús M. García-Iglesias & Rebeca I. Muñoz Torres, 2018. "Economy and Divorces: Their Impact Over Time on the Self-Employment Rates in Spain," Journal of Family and Economic Issues, Springer, vol. 39(3), pages 422-435, September.
    21. Lougui, Monia & Broström, Anders, 2020. "The Labor Market Value of Experience from Temporary Self-employment," Working Paper Series in Economics and Institutions of Innovation 484, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    22. Léa Toulemon, 2016. "Job quality, health insurance and the price of medical products : essays in applied economics [Qualité de l'emploi, assurance santé et prix des médicaments à l'hôpital : essais en économie appliquée]," Sciences Po Economics Publications (main) tel-03455279, HAL.

    More about this item

    Keywords

    ;
    ;
    ;

    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; Personnel Economics - - Business Administration - - - New Firms; Startups

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp5373. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Fallak (email available below). General contact details of provider: https://edirc.repec.org/data/izaaalu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.