Entrepreneurship, Economic Risks, and Risk-Insurance in the Welfare State
We find strong evidence in the OECD country panel data to support the Knightian view that non-diversifiable economic risks shape the equilibrium entrepreneurship in an occupational choice model. Differential social insurance of entrepreneurial and labor risk is found to be statistically significant and detrimental to entrepreneurship. The crowding-out effect of public production of private goods on entrepreneurship dominates the crowding-in effect of public production of public goods. Evidence is found for the proposition that the rate of entrepreneurship is positively related to the degree of income inequality and negatively to the union power in the economy. The results suggest that a high living standard also has a detrimental effect on entrepreneurial risk-taking.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+45) 3532 4411
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk/epru/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
- Kanbur, S. M., 1981.
"Risk taking and taxation : An alternative perspective,"
Journal of Public Economics,
Elsevier, vol. 15(2), pages 163-184, April.
- Kanbur, S.M, 1978. "Risk Taking and Taxation : An Alternative Perspective," The Warwick Economics Research Paper Series (TWERPS) 136, University of Warwick, Department of Economics.
- Hans-Werner Sinn, 1994.
"A Theory of the Welfare State,"
NBER Working Papers
4856, National Bureau of Economic Research, Inc.
- Alverez, L.H.R. & Kanniainen, V., 1998. "From Local Theory of Risk Aversion to an Intertemporal Theory of Risks Under Discrete Choices," University of Helsinki, Department of Economics 442, Department of Economics.
- Hans-Werner Sinn, 1995.
"Social Insurance, Incentives, and Risk Taking,"
NBER Working Papers
5335, National Bureau of Economic Research, Inc.
- Jenkins, Stephen P, 1995. "Accounting for Inequality Trends: Decomposition Analyses for the UK, 1971-86," Economica, London School of Economics and Political Science, vol. 62(245), pages 29-63, February.
- Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August.
- Pekka Ilmakunnas & Jukka Topi, 1999.
"Microeconomic and Macroeconomic Influences on Entry and Exit of Firms,"
Review of Industrial Organization,
Springer, vol. 15(3), pages 283-301, November.
- Ilmakunnas, Pekka & Topi, Jukka, 1996. "Microeconomic and Macroeconomic Influences on Entry and Exit of Firms," Research Discussion Papers 6/1996, Bank of Finland.
- Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
- Lindh, Thomas & Ohlsson, Henry, 1996. "Self-Employment and Windfall Gains: Evidence from the Swedish Lottery," Economic Journal, Royal Economic Society, vol. 106(439), pages 1515-26, November.
- Van Praag, C Mirjam & Van Ophem, Hans, 1995. "Determinants of Willingness and Opportunity to Start as an Entrepreneur," Kyklos, Wiley Blackwell, vol. 48(4), pages 513-40.
- Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-48, August.
- Blanchflower, D.G. & Oswald, A., 1991.
"What Makes an Entrepreneur?,"
Economics Series Working Papers
99125, University of Oxford, Department of Economics.
- Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991.
"Unemployment: Macroeconomic Performance and the Labour Market,"
Oxford University Press, number 9780198284345, March.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, March.
- Blau, David M, 1987. "A Time-Series Analysis of Self-employment in the United State," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 445-67, June.
- Douglas Holtz-Eakin & David Joulfaian & Harvey Rosen, 1993.
"Sticking It Out: Entrepreneurial Survival and Liquidity Constraints,"
698, Princeton University, Department of Economics, Industrial Relations Section..
- Holtz-Eakin, Douglas & Joulfaian, David & Rosen, Harvey S, 1994. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 53-75, February.
- Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1993. "Sticking it Out: Entrepreneurial Survival and Liquidity Constraints," NBER Working Papers 4494, National Bureau of Economic Research, Inc.
- Black, Jane & de Meza, David & Jeffreys, David, 1996. "House Price, the Supply of Collateral and the Enterprise Economy," Economic Journal, Royal Economic Society, vol. 106(434), pages 60-75, January.
- Kanbur, S M, 1979. "Of Risk Taking and the Personal Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 769-97, August.
- Sinn, Hans-Werner, 1996. "Social Insurance, Incentives and Risk Taking," Munich Reprints in Economics 19834, University of Munich, Department of Economics.
- Acs, Zoltán J & Audretsch, David B & Evans, David S, 1994. "Why Does the Self-Employment Rate Vary Across Countries and Over Time?," CEPR Discussion Papers 871, C.E.P.R. Discussion Papers.
- Cressy, Robert, 1996. "Are Business Startups Debt-Rationed?," Economic Journal, Royal Economic Society, vol. 106(438), pages 1253-70, September.
When requesting a correction, please mention this item's handle: RePEc:kud:epruwp:99-03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann)
If references are entirely missing, you can add them using this form.