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Can Unemployment Insurance Spur Entrepreneurial Activity? Evidence from France
- Source :
- SSRN
- Publication Year :
- 2013
-
Abstract
- We study a large-scale French reform that provided generous downside insurance for unemployed individuals starting a business. We study whether this reform affects the composition of people who are drawn into entrepreneurship. New firms started in response to the reform are, on average, smaller, but have similar growth expectations and education levels compared to start-ups before the reform. They are also as likely to survive or to hire. In aggregate, the effect of the reform on employment is largely offset by large crowd-out effects. However, because new firms are more productive, the reform has the impact of raising aggregate productivity. These results suggest that the dispersion of entrepreneurial abilities is small in the data, so that the facilitation of entry leads to sizable Schumpeterian dynamics at the firm-level.
- Subjects :
- Economics and Econometrics
Entrepreneurship
Labour economics
Exploit
Unemployment insurance
media_common.quotation_subject
Crowding out
Aggregate productivity
jel:G00
Accounting
0502 economics and business
Economics
Quality (business)
050207 economics
Productivity
media_common
050208 finance
05 social sciences
Employment growth
Unemployment
Facilitation
[SHS.GESTION]Humanities and Social Sciences/Business administration
Business
Finance
Barriers to entry
Subjects
Details
- Database :
- OpenAIRE
- Journal :
- SSRN
- Accession number :
- edsair.doi.dedup.....5844585972b39a349ab7a8eb5eb0efb0