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One-way ticket from unemployment to entrepreneurship? Evaluation of allowance for self-employment in least developed regions Cover

One-way ticket from unemployment to entrepreneurship? Evaluation of allowance for self-employment in least developed regions

Open Access
|Dec 2022

Figures & Tables

Fig. 1

The proportion of employed and self-employed in the more developed and less-developed sub-regions after the end of support
The proportion of employed and self-employed in the more developed and less-developed sub-regions after the end of support

Analysis of the selected factors affecting the employment and self-employment of supported people 1 and 2 years after the end of support (probit regression)

Dependent variablesEmployed (total) (yes = 1, no = 0)Employed (without self-employed)Self-employed (yes = 1, no = 0)
1 year after the end of support1 year after the end of support2 years after the end of support1 year after the end of support2 years after the end of support
Coef. (z-stat.)dy/dxCoef. (z-stat.)dy/dxCoef. (z-stat.)dy/dxCoef. (z-stat.)dy/dxCoef. (z-stat.)dy/dx
Gender (male = 1)0.248*** (3.05)0.0490.266*** (2.71)0.0820.191* (1.91)0.0540.116* (1.79)0.0470.251*** (3.57)0.096
Married−0.224** (−2.48)−0.044−0.309*** (−3.03)−0.095−0.226** (−2.17)−0.0650.038 (0.55) 0.085 (1.12)
Age0.067** (2.02)0.006−0.034 (−0.63) −0.005 (−0.83) 0.002 (0.46) 0.107*** (3.74)0.041
Age2−0.0009** (−2.08) −0.001*** (−3.63)
Amount of support (in EUR)−0.0005 (−0.69) −0.0001 (−1.70) −0.001 (−1.00) 0.0002*** (−3.28)0.000070.0002*** (2.82)0.00006
Unemployment length (in days)−0.0002*** (−5.04)−0.00004−0.0002*** (−4.51)−0.00007−0.0002*** (−4.63)−0.0001−0.0001* (−1.89)−0.00003−0.0002*** (−3.83)−0.0001
Length of support (in years)t0.067*** (3.74)0.00020.001**** (3.01)0.00030.001*** (2.87)0.00030.001*** (4.32)0.00040.001*** (4.06)0.0004
Year of support (start of the support)0.067 (1.27) 0.111* (1.88)0.0340.128* (1.86)0.036−0.034 (−0.91) −0.092* (−1.72)−0.036
Education (coded from 1-lowest to 7-highest)0.132*** (4.40)0.0250.207*** (6.00)0.06290.135*** (3.9)0.038−0.053** (−2.55)−0.022−0.056** (−2.48)−0.021
Previously worked in primary sector (NACE 1 and 2)−0.341 (−1.73) −0.19 (−0.80) 0.102 (0.39) −0.272 (−1.46) −0.167 (−0.89)
Previously worked in industry (NACE 3)0.219 (1.63) 0.369** (2.34)0.10.065 (0.42) −0.029 (−0.31) −0.021 (−0.21)
Same place (work and home)0.113 (0.87) 0.186 (1.20) 0.049 (0.32) 0.064 (0.60) 0.135 (1.18)
Less-developed sub-regions−0.077 (−0.87) −0.005 (−0.05) −0.15** (−1.39)−0.038−0.164** (−2.35)−0.064−0.217*** (−2.84)−0.082
Cons.−132.65 (−1.29) −222.80* (−1.88) −257.4** (−1.86) 67.51 (0.90) 181.5* (1.68)
Observations1683 896 894 16831484
Wald chi2140.5 131.62 97.5 61.7373.60
Pseudo R20.106 0.143 0.11 0.0260.043

Characteristics of supported job seekers based on selected variables

All sub-regionsLess developedMore developed
MeanStd. dev.Min.Max.MeanMean
Age (years)34.89.9186134.7334.86
Total length of unemployment (days)1036.4973.51037305943.71216.7
Sum of support (EUR)3971.1606.8189946453856.14186.9

Description of variables used in the regression analysis

VariablesDescription of variables
Employed 1 year afterFollow-up 1 year after the end of support:coded 1 if employed in any job (also self-employed), otherwise as 0
Employed 2 years afterFollow-up 2 years after the end of support:coded 1 if employed in any job (also self-employed), otherwise as 0
Self-employed 1 year afterFollow-up 1 year after the end of support:coded 1 if self-employed, otherwise coded as 0
Self-employed 2 years afterFollow-up 2 years after the end of support:coded 1 if self-employed, otherwise coded as 0
Independent variables
Gender (male)Gender of the beneficiary: coded 1 if male, otherwise 0
AgeAge of the beneficiary (years)
Age2Squared value of age (years)
MarriedMarital status: coded 1 if married, otherwise 0
Unemployment lengthTotal length of previous unemployment (days)
EducationAchieved education: ordinal variable from 0 to 8 (without formal education = 0, primary education = 1, lower vocational education = 2, secondary vocational education = 3, completed secondary education = 4, higher vocational education = 5, bachelor's degree = 6, master's degree = 7, PhD degree = 8)
Tertiary educationCoded 1 if achieved bachelor's, master's degree or PhD (6–8), otherwise 0
Primary education or lower vocational educationCoded 1 if the highest achieved education is primary or lower vocational education (1–2), otherwise 0 (people without education excluded)
Primary sector (based on NACE 1 and 2)The sector in which the beneficiary was active before unemployment. Based on the Statistical Classification of Economic Activities in the European Community, coded 1 if the Statistical classification of economic activities (NACE) code is 1 (agriculture, forestry and fishing) or 2 (mining and quarrying), otherwise 0
IndustryThe sector in which the beneficiary was active before unemployment. Based on the Statistical Classification of Economic Activities in the European Community, coded 1 if the NACE code is 3, otherwise 0
Less-developed sub-regionsLess-developed sub-regions (according to the Slovak government) coded 1, otherwise coded as 0 (more developed sub-regions)
Same placeSame place of work and living. Coded 1 if the individual is living in the same city or village where his/her job is located, otherwise 0
Amount of financial supportTotal amount of financial support from the self-employment support allocated to the beneficiary (in EUR)
Length of supportThe length of the period during which the beneficiary is supported and that is also mandatory to carry out self-employment business (in years)
Year of supportOrder of the year when the support started to take place during the selected period (year 2012 = 1, year 2013 = 2, year 2014 = 3, …, year 2017 = 6)

Comparison of survival of supported business and maintenance of employment for selected groups

StatusSub-regionsMen in construction sector (%)Men in whole sample (%)
EmployedMore developed83.8189.80
Less developed73.8185.51
Self-employedMore developed51.4346.52
Less developed59.5238.07

Status of supported people classified by selected characteristics 2 years after the end of support

Sub-region typeMen (%)Women (%)Married men (%)Married women (%)Men with tertiary education (%)Women with tertiary education (%)Women with vocational education or lower (%)
EmployedMore developed89.885.387.985.595.386.777.8
Less developed85.574.883.671.190.496.555.8
Self-employedMore developed46.53548.337.236.731.134.9
Less developed38.129.245.931.328.742.119.2

Characteristics of supported unemployed people – selected variables

Unemployed people supported by the schemeFull sample of unemployed peopleSelf-employed in sub-region (2015)Inhabitants of sub-region (2015)
Men59.13%51.96%69.2%48.40%
Women40.84%48.02%30.8%51.52%
Single46.26%52.78% 44.03%
Married44.02%34.31% 37.27%
Average age (years)34.835.7343.840.82

The status of supported people classified by educational level 2 years after the end of support

Educational level
Sub-region typeElementarySecondary vocationalSecondaryHigher vocationalBachelor'sMaster'sPhD/doctoralTogether
EmployedMore developed85.2%82.5%89.5%57.1%71.4%93%85.7%88%
Less developed61.5%70.5%81.8%50%71.4%93.7%100%81.3%
Self-employedMore developed40.7%47.4%44.3%14.3%14.3%36.2%14.3%41.9%
Less developed23.1%34.4%36.7%0%14.3%35%0%34.7%

The results of bivariate probit regression (1 year after support)

More developed sub-regionsLess-developed sub-regions
Dependent variablesEmployed 1 year after the end of supportSelf-employed 1 year after the end of supportEmployed 1 year after the end of supportSelf-employed 1 year after the end of support
Coef.Coef.Coef.Coef.
Gender (male = 1/female = 0)0.0420.1080.400**0.231*
Gender × tertiary education (interaction term)0.447*0.110.127−0.741***
Tertiary education0.093−0.336***0.438*0.439**
Married−0.16−0.065−0.1430.242**
Age−0.0020.002−0.0030.002
Amount of financial support (EUR)−0.00010.0001**−0.00030.0005***
Unemployment length (days)−0.0003**−0.0001−0.0002***−0.0001
Length of support (years)0.001***0.001***0.002***0.0006
Year of support0.098*−0.0072*−0.0750.033
Previously worked in primary sector (NACE 1 and 2)−0.238−0.219−0.389−0.333
Previously worked in industry (NACE 3)0.162−0.1070.3010.057
Cons.−196.3*143.09−151.90−69.57
Number of observations1137 552
Language: English
Page range: 1 - 17
Submitted on: Aug 20, 2022
Accepted on: Oct 27, 2022
Published on: Dec 10, 2022
Published by: University of Matej Bel in Banska Bystrica, Faculty of Economics
In partnership with: Paradigm Publishing Services
Publication frequency: 2 issues per year

© 2022 Ján Huňady, Miroslav Šipikal, Peter Pisár, Vladimír Hiadlovský, published by University of Matej Bel in Banska Bystrica, Faculty of Economics
This work is licensed under the Creative Commons Attribution 4.0 License.