Do the unemployed become successful entrepreneurs?

Abstract

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Stars and Misfits: Self-Employment and Labor Market Frictions

“…Third, entrants into self-employment from unemployment fare much worse than other entrants. These dynamic predictions are also consistent with prior empirical evidence: the relationship between variety and entry into self-employment has previously been studied by, inter alia, Lazear (2005), Wagner (2006), and Åstebro and Thompson (2007), while the negative consequences of a history of unemployment has been documented in Amit, Muller and Cockburn (1995), Alba-Ramirez (1994), and Andersson and Wadensjo (2007). We also tested these predictions ourselves using the Korean Labor and Income Panel Study.…”

Desperate entrepreneurs: no opportunities, no skills

“…Empirical work suggests that the small-business sector is larger in countries in which the costs for business start-ups are lower (Ayyagari et al 2007;Stenholm et al 2013). Moreover, access to resources, especially the availability of financial means, is a core condition for successful venture creation (Evans and Leighton 1989;Busenitz et al 2000;Åstebro and Bernhardt 2003;Andersson and Wadensjö 2007;Caliendo et al 2015).…”

“…Necessity-driven entrepreneurship is not necessarily a desired outcome. Being pushed into self-employment bears the risk of not being well prepared before engaging in entrepreneurial activities (Carrasco 1999;Pfeiffer and Reize 2000;Andersson and Wadensjö 2007). Although the formal education level might be similar for all business founders, people that start a business due to unemployment have less employment and industry-specific experience and fewer spillovers from intergenerational transmission (Caliendo et al 2015).…”

Subsidized start-ups out of unemployment: a comparison to regular business start-ups

“…However, the validity of the results is restricted due to data limitations, i.e., regional representativeness, the limited scope of available characteristics and cross-sectional information preventing an in-depth analysis of business development. From an international perspective, Andersson and Wadensjö (2007) compare business outcomes of self-employed individuals conditional on their prior employment status in Sweden. They find that start-ups out of employment perform best in terms of income and employment growth.…”