Jenny Nykvist: Research Institute of Industrial Economics (IFN), Postal: and Konjunkturinstitutet, Stockholm, Sweden
Abstract: A large literature has studied the effect of displacement on labor market outcomes in general, but none has evaluated how the displaced manage as self-employed. This paper studies how the survival of the business is affected by displacement in connection to entry, using a discrete-time proportional hazard model on a matched sample of displaced and non-displaced individuals. The main result of the paper is that, as a consequence of previous displacement, the probability of switching from self-employment to paid employment decreases and the probability of switching to unemployment is unaffected.
26 pages, September 24, 2008
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