2006–2010

Displacement and Self-employment Entry

Reprint No. 2009:33

Author(s): Jenny von GreiffYear: 2009 Title: Labour Economics Volume (No.): 16 (5) Pages: 556–565
Online article (restrictions may apply)


Displacement is expected to decrease the reservation wage of self-employment by decreasing earnings in paid employment and increasing the probability of unemployment. This paper examines whether displacement increases the probability of self-employment using propensity score matching on Swedish register-based data. The data include all individuals displaced due to plant closures in 1987 and 1988, and a random sample of 200,000 employed individuals. The results suggest that displacement almost doubles the probability of entering self-employment the year after displacement. A sub-sample analysis indicates that individuals with a potentially worse position on the labor market react more strongly to displacement in terms of entering self-employment.


Reference:
von Greiff, Jenny (2009), "Displacement and Self-employment Entry". Labour Economics 16(5), 556–565.

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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