Do the Unemployed Become Successful Entrepreneurs? A Comparison between the Unemployed, Inactive and Wage-Earners

By Pernilla Andersson Joona, E. Wadensjö. Social Science Research Network, 2006

139 citations recorded by the source corpus.

In many countries unemployed people are helped to become self-employed. Self-employment, however, does not necessarily lead to success. Many leave self-employment after a short period and the economic outcome varies greatly. It is important to learn more about the economic outcome for unemployed who become self-employed. In the first part of the paper we analyse who became self-employed in the period from 1999 to 2002 of Swedish-born men aged 20 to 60 years who were either wage-earners, unemployed or inactive in 1998. We find that the unemployed, and even more the inactive, are overrepresented among those who become self-employed. In the second part of the paper we study the economic outcome of self-employment in 2002 for Swedish-born men who were either unemployed, inactive or wage-earners in 1998. Economic outcome in 2002 is measured using income from self-employment and having employees in the firm. The estimations show that those who were wage earners in 1998 have higher incomes and are also employing other people in their business to a much higher extent in 2002 than those who in 1998 were unemployed or inactive. This indicates that support to unemployed to become self-employed should be implemented with great care.

Subfields: Economics and Econometrics, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/6d58b5ed95bb3407dbc1dfbd407b899aa7d8bd5e

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Citations in the corpus

Born to be alive? The survival of innovative and non-innovative French micro-start-ups (2014, background): “However, it has been shown that the inactive or unemployed are overrepresented among entrepreneurs, along with the fact that being employed in the period before the creation was positively impacts survival (Andersson & Wadensjö, 2007).”
The impact of human capital on the early success of necessity versus opportunity-based entrepreneurs (2014, unknown): “…extent than those who have entered directly from paid employment (Carrasco, 1999; Pfeiffer and Reize, 2000), and that new founders who were formerly unemployed have on average lower economic outcomes and a lower propensity to positively contribute to job creation (Andersson and Wadensjö, 2006).”
My first employee: an empirical investigation (2016, background): “…that have investigated how personal characteristics of the entrepreneur affect their ability to create jobs, e.g. previous labour market status (Andersson and Wadensjo 2007) and experience (Cowling et al. 2004), gender (Burke et al. 2001), entrepreneurship ability (Burke et al. 2000, 2001) and…”