%0 Journal Article
%T ¡°Fine... I¡¯ll do it myself¡±: Lessons from self-employment grants in a long recession period
%A Srhoj
%A Stjepan
%A Zilic
%A Ivan
%J -
%D 2020
%X Sa£¿etak This paper evaluates the effect of a self-employment grant scheme for unemployed individuals¡ªdesigned to ease the first 12 months of business operation¡ªon firm growth, survival, and labor market re-integration in Croatia in the 2010¨C2017 period. Grants offered a moderate amount of finances (up to 50% of average annual gross salary) and absorbed only 5% of funds allocated to active labor market policies, but accounted for 10% of new firms opened throughout the years. We use the universe of unemployment episodes and the universe of unlimited and limited liability firms to document the effect of self-employment grants both causally and descriptively. Exploiting longitudinal structure of unemployment episodes dataset, we find that individuals who finish their spell with a grant have a significantly lower probability of returning to unemployment. Also, we find that limited liability firms opened via a grant have lower growth potential and worse survival profile, while unlimited liability firms¡ªeven though a sizable portion of them closes after a required 12-month grant period¡ªhave a more favorable survival profile. While these results are in line with the rest of the empirical literature on the self-employment grants, we also find that the effectiveness of these grants has increased throughout the years, indicating towards the direction of institutional learning
%K self-employment grant
%K evaluation
%K unemployment
%K firm performance.
%U https://hrcak.srce.hr/index.php?show=clanak&id_clanak_jezik=338401