Unemployment Insurance and Entrepreneurship

Knut Røed () and Jens Fredrik Skogstrøm ()
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Jens Fredrik Skogstrøm: Ragnar Frisch Centre for Economic Research

No 7121, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Based on administrative registers from Norway, we examine how unemployment insurance (UI) and active labor market programs (ALMP) affect the transition rates from unemployment to regular employment and entrepreneurship. We find that the entrepreneurship hazard is highly responsive with respect to UI incentives, and that the probability of starting up a new business increases sharply around the time of UI exhaustion. We also find that while participation in ALMP has a positive impact on the employment hazard, it has no effect on entrepreneurship. We speculate that this reflects the programs' one-sided focus on job search rather than job creation.

Keywords: unemployment; entrepreneurship; self-employment (search for similar items in EconPapers)
JEL-codes: J65 L26 M13 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2013-01
New Economics Papers: this item is included in nep-ent, nep-ias and nep-lab
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Published - revised version published in: Labour: Review of Labour Economics and Industrial Relations, 2014, 26 (4), 430-448

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Journal Article: Unemployment Insurance and Entrepreneurship (2014)
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