Persistence in Entrepreneurship With and Without Personnel: The Role of Human Capital and Previous Unemployment

17 Pages Posted: 27 Feb 2011

Date Written: February 26, 2011

Abstract

By considering entrepreneurs who hire employees – employers – and entrepreneurs without personnel – own-account workers – as related but distinct groups within entrepreneurship, this work analyzes the roles of different factors in entrepreneurship survival from a new perspective: contrasting the determinants of own-account workers’ survival with those affecting employers’ survival. Toward this end, discrete choice models under competing risks frameworks are applied to data drawn from the European Community Household Panel for the EU-15 (EUROSTAT). Our results suggest that survival chances are markedly higher for employers than for own-account workers, especially when non-employment exits are considered. We also observe that high qualifications have positive and statistically significant effects on survival rates of employers, whatever exit route, while have no significant effect on survival of own-account workers. Finally, we find that entering entrepreneurship (with and without personnel) from unemployment – i.e., the target group for entrepreneurship incentives – strongly increases the probability of switching back to unemployment. Thus, entrepreneurship and higher education policies should be considered together in order to develop high quality entrepreneurial businesses.

Keywords: Entrepreneurship, Employers, Own-Account Workers, Persistence, Formal Education, Unemployment

JEL Classification: J24, J28, J38, J64, J68

Suggested Citation

Millan, Jose Maria and Congregado, Emilio and Román, Concepción, Persistence in Entrepreneurship With and Without Personnel: The Role of Human Capital and Previous Unemployment (February 26, 2011). Available at SSRN: https://ssrn.com/abstract=1770504 or http://dx.doi.org/10.2139/ssrn.1770504

Jose Maria Millan (Contact Author)

University of Huelva ( email )

Plaza de la Merced 11
Huelva, Huelva 21071
Spain
+34959217886 (Phone)

Emilio Congregado

University of Huelva ( email )

Departament of Economics
Plaza de la Merced, 11
Huelva, Huelva 21002
Spain

HOME PAGE: http://www.uhu.es/emilio.congregado

Concepción Román

University of Huelva ( email )

Plaza de la Merced 11
Huelva, Huelva 21071
Spain
+34959217886 (Phone)

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