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From unemployment to self-employment: the role of entrepreneurship training

Listed author(s):
  • Marios Michaelides
  • Scott Davis

This paper uses data from the Growing America Through Entrepreneurship (GATE) program to assess the effectiveness of providing self-employment training to unemployed workers during a period of moderate unemployment and during the Great Recession. Results show that self-employment training can significantly improve the short-term self-employment and overall employment rates of unemployed workers, with effects on self-employment persisting for long periods after program entry. Although it appears unlikely that self-employment training may improve self-employment earnings, there is evidence that some participants may achieve higher salary and total earnings when the labor market is relatively strong. Based on these findings, we conclude that self-employment training can potentially be an effective short-term reemployment strategy, regardless of the overall economic conditions, but it is unlikely to help unemployed workers improve their long-term employment and earnings outcomes.

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File URL: http://papers.econ.ucy.ac.cy/RePEc/papers/09-16.pdf
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Paper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 09-2016.

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Length: 39 pages
Date of creation: Nov 2016
Handle: RePEc:ucy:cypeua:09-2016
Contact details of provider: Web page: http://www.ucy.ac.cy/econ/en

References listed on IDEAS
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  1. von Greiff, Jenny, 2009. "Displacement and self-employment entry," Labour Economics, Elsevier, vol. 16(5), pages 556-565, October.
  2. Timothy Bates, 1985. "Entrepreneur Human Capital Endowments and Minority Business Viability," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 540-554.
  3. Robert W. Fairlie & Alicia Robb, 2007. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," ILR Review, Cornell University, ILR School, vol. 60(2), pages 225-245, January.
  4. Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 757-793.
  5. Robert W. Fairlie & Harry A. Krashinsky, 2012. "Liquidity Constraints, Household Wealth, And Entrepreneurship Revisited," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(2), pages 279-306, June.
  6. Fairlie, Robert W, 1999. "The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 80-108, January.
  7. Robert W. Fairlie & Alicia M. Robb, 2007. "Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 289-323.
  8. David G. Blanchflower & Phillip B. Levine & David J. Zimmerman, 2003. "Discrimination in the Small-Business Credit Market," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 930-943, November.
  9. Amelie Constant & Klaus F. Zimmermann, 2004. "Self-Employment Dynamics across the Business Cycle: Migrants versus Natives," Discussion Papers of DIW Berlin 455, DIW Berlin, German Institute for Economic Research.
  10. Ken Cavalluzzo & John Wolken, 2005. "Small Business Loan Turndowns, Personal Wealth, and Discrimination," The Journal of Business, University of Chicago Press, vol. 78(6), pages 2153-2178, November.
  11. Michael Hout & Harvey Rosen, 2000. "Self-Employment, Family Background, and Race," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 670-692.
  12. repec:mpr:mprres:5464 is not listed on IDEAS
  13. Michaelides, Marios & Benus, Jacob, 2012. "Are self-employment training programs effective? Evidence from Project GATE," Labour Economics, Elsevier, vol. 19(5), pages 695-705.
  14. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
  15. Glocker, Daniela & Steiner, Viktor, 2007. "Self-Employment: A Way to End Unemployment? Empirical Evidence from German Pseudo-Panel Data," IZA Discussion Papers 2561, Institute for the Study of Labor (IZA).
  16. Paul D. Reynolds & Nancy M. Carter & William B. Gartner & Patricia G. Greene, 2004. "The Prevalence of Nascent Entrepreneurs in the United States: Evidence from the Panel Study of Entrepreneurial Dynamics," Small Business Economics, Springer, vol. 23(4), pages 263-284, November.
  17. Roy Thurik & Isabel Grilo, 2005. "Latent and actual entrepreneurship in Europe and the US: some recent developments," Papers on Entrepreneurship, Growth and Public Policy 2005-24, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  18. Jeanne Bellotti & Sheena McConnell & Jacob Benus, "undated". "Growing America Through Entrepreneurship," Mathematica Policy Research Reports d3bbbcef77fe49cb988c23d84, Mathematica Policy Research.
  19. Amelia Biehl & Tami Gurley-Calvez & Brian Hill, 2014. "Self-employment of older Americans: do recessions matter?," Small Business Economics, Springer, vol. 42(2), pages 297-309, February.
  20. Constant, Amelie & Zimmermann, Klaus F, 2004. "Self-Employment Dynamics Across the Business Cycle: Migrants vs Natives," CEPR Discussion Papers 4754, C.E.P.R. Discussion Papers.
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