Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75523
Authors: 
Ilmakunnas, Pekka
Kanniainen, Vesa
Year of Publication: 
2000
Series/Report no.: 
CESifo Working Paper 356
Abstract: 
We find evidence in the OECD cross-country data to support the Knightian view that non-diversifiable economic risks shape equilibrium entrepreneurship in an occupational choice model. Differential social insurance of entrepreneurial and labor risk is found to be statistically significant and detrimental to entrepreneurship. The crowding-out effect of public production of private goods on entrepreneurship dominates the crowding-in effect of public production of public goods in the OECD data. Weak evidence is found for the proposition that the rate of entrepreneurship is related to the degree of income inequality and to the union power in the economy. The results also suggest that a high living standard has a detrimental effect on self-employment.
Subjects: 
Entrepreneurship
risks
the welfare state
social risk insurance
crowding-out
Document Type: 
Working Paper

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