Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81981
Year of Publication: 
1999
Series/Report no.: 
EPRU Working Paper Series No. 1999-03
Publisher: 
University of Copenhagen, Economic Policy Research Unit (EPRU), Copenhagen
Abstract: 
We find strong evidence in the OECD country panel data to support the Knightian view that non-diversifiable economic risks shape the 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. Evidence is found for the proposition that the rate of entrepreneurship is positively related to the degree of income inequality and negatively to the union power in the economy. The results suggest that a high living standard also has a detrimental effect on entrepreneurial risk-taking.
Document Type: 
Working Paper

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