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Start-up subsidies for the unemployed: Opportunities and limitations

Caliendo, Marco, (2016), “Start-up subsidies for the unemployed: Opportunities and limitations”,  IZA World of Labor 2016: 200, Μάρτιος

In order to curb unemployment, OECD countries have made enormous efforts and spent considerable sums on active labor market policies (0.6% of GDP in 2011). Governments have mainly relied on traditional measures such as job creation schemes, training programs, and wage subsidies which have often shown dissatisfactory impacts on income and employment prospects of participants. A promising alternative to traditional programs are start-up subsidies for the unemployed. This type of program supports people out of work to start their own business, thereby not only bringing these people back into work, but ideally also creating new employment opportunities for others as well. Experiences with start-up subsidies for unemployed are diverse and come from various settings. In a new IZA World of Labor article, Marco Caliendo (University of Potsdam) summarizes scientific evidence on the effectiveness of start-up subsidies in industrialized countries and highlights consequences for policy design.

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