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

Abstract

Abstract Entrepreneurship support for the unemployed is one of the most common entrepreneurial policy tools for small start-ups. Usually, this tool is aimed at simultaneously promoting entrepreneurship as well as reducing unemployment. The aim of this paper is to examine in detail the effects of such an instrument in one of the least developed regions of the European Union (EU). At the same time, however, this region has been very effective in reducing the unemployment rate at the time of the research. The paper focuses, in particular, on entrepreneurship survival after support and compares it with maintenance of employment, in general. Our results, based on probit and bivariate probit regression, suggest that gender, age, economic development of the region and the amount of support are among the most important factors affecting the survival of start-ups after support. The differences between more developed and less-developed sub-regions are particularly pronounced for certain socio-economic groups such as women with tertiary education or married couples. We have also illustrated some aspects that artificially prolong the survival of supported entrepreneurship, such as the use of entrepreneurship as a substitute for dependent or part-time work.