“Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period

This paper evaluates the effect of a self-employment grant scheme for unemployed individuals—designed to ease the first 12 months of business operation—on firm growth, survival, and labor market reintegration in Croatia in the 2010–2017 period. Grants offered a moderate amount of finances (up to 50%...

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Autores principales:	Srhoj Stjepan, Zilic Ivan
Formato:	article
Lenguaje:	EN
Publicado:	Sciendo 2021
Materias:	self-employment grant evaluation unemployment firm performance j68 m13 h25 h43 Labor policy. Labor and the state HD7795-8027
Acceso en línea:	https://doaj.org/article/db51176d7e204d79ad2dc3c6617ab146
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spelling	oai:doaj.org-article:db51176d7e204d79ad2dc3c6617ab1462021-12-05T14:11:08Z“Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period2193-900410.2478/izajolp-2021-0006https://doaj.org/article/db51176d7e204d79ad2dc3c6617ab1462021-06-01T00:00:00Zhttps://doi.org/10.2478/izajolp-2021-0006https://doaj.org/toc/2193-9004This paper evaluates the effect of a self-employment grant scheme for unemployed individuals—designed to ease the first 12 months of business operation—on firm growth, survival, and labor market reintegration in Croatia in the 2010–2017 period. Grants offered a moderate amount of finances (up to 50% of average annual gross salary) and absorbed only 5% of funds allocated to active labor market policies (ALMPs), but accounted for 10% of new firms opened throughout the years. We contribute to the literature on self-employment grants with several novel findings. Exploiting the longitudinal structure of the unemployment episodes dataset, we find that individuals who finish their spell with a grant have a significantly lower probability of returning to unemployment. The policy is particularly effective for individuals who would have otherwise had labor market opportunities (men, more educated, prime-age workers, previously employed), individuals who became unemployed after inactivity and lost their job due to a firm's closure—which demonstrates that self-employment subsidies can be effective in ameliorating unemployment. However, the policy was not effective for longer unemployed individuals. At the firm level, we find descriptive evidence that limited liability firms opened via a grant have lower growth potential and worse survival profile, while unlimited liability firms—even though a sizable portion of them closes after a required 12-month grant period—have a more favorable survival profile. Finally, we also find that the effectiveness of these grants has increased throughout the years, indicating toward the direction of institutional learning.Srhoj StjepanZilic IvanSciendoarticleself-employment grantevaluationunemploymentfirm performancej68m13h25h43Labor policy. Labor and the stateHD7795-8027ENIZA Journal of Labor Policy, Vol 11, Iss 1, Pp 413-424 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	self-employment grant evaluation unemployment firm performance j68 m13 h25 h43 Labor policy. Labor and the state HD7795-8027
spellingShingle	self-employment grant evaluation unemployment firm performance j68 m13 h25 h43 Labor policy. Labor and the state HD7795-8027 Srhoj Stjepan Zilic Ivan “Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period
description	This paper evaluates the effect of a self-employment grant scheme for unemployed individuals—designed to ease the first 12 months of business operation—on firm growth, survival, and labor market reintegration in Croatia in the 2010–2017 period. Grants offered a moderate amount of finances (up to 50% of average annual gross salary) and absorbed only 5% of funds allocated to active labor market policies (ALMPs), but accounted for 10% of new firms opened throughout the years. We contribute to the literature on self-employment grants with several novel findings. Exploiting the longitudinal structure of the unemployment episodes dataset, we find that individuals who finish their spell with a grant have a significantly lower probability of returning to unemployment. The policy is particularly effective for individuals who would have otherwise had labor market opportunities (men, more educated, prime-age workers, previously employed), individuals who became unemployed after inactivity and lost their job due to a firm's closure—which demonstrates that self-employment subsidies can be effective in ameliorating unemployment. However, the policy was not effective for longer unemployed individuals. At the firm level, we find descriptive evidence that limited liability firms opened via a grant have lower growth potential and worse survival profile, while unlimited liability firms—even though a sizable portion of them closes after a required 12-month grant period—have a more favorable survival profile. Finally, we also find that the effectiveness of these grants has increased throughout the years, indicating toward the direction of institutional learning.
format	article
author	Srhoj Stjepan Zilic Ivan
author_facet	Srhoj Stjepan Zilic Ivan
author_sort	Srhoj Stjepan
title	“Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period
title_short	“Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period
title_full	“Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period
title_fullStr	“Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period
title_full_unstemmed	“Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period
title_sort	“fine...i’ll do it myself”: lessons from self-employment grants in a long recession period
publisher	Sciendo
publishDate	2021
url	https://doaj.org/article/db51176d7e204d79ad2dc3c6617ab146
work_keys_str_mv	AT srhojstjepan fineilldoitmyselflessonsfromselfemploymentgrantsinalongrecessionperiod AT zilicivan fineilldoitmyselflessonsfromselfemploymentgrantsinalongrecessionperiod
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“Fine...I’ll do it myself”: Lessons from self-employment grants in a long recession period

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