From Unemployment to Self-Employment

An Evaluation of Self-Employment Assistance Programs

Bibliographic Data

ID21557934
AuthorsAlexandre Gaillard (John Brown University), Sumudu Kankanamge (0000-0001-6580-5756, University of Kinshasa)
Year2026
Volume44
Issue1
Pages309-349
Publication date2026-01-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueJournal of Labor Economics (JOURNAL)
Journal identifiersISSN: 0734-306X • E-ISSN: 1537-5307
PublisherUniversity of Chicago Press (PUBLISHER • US)
DOI10.1086/732765
OpenAlexW4401612532
LanguageEN
References cited27

This paper evaluates self-employment assistance (SEA) programs, which are government initiatives extending the unemployment insurance system to support unemployment to self-employment transitions. Using a general equilibrium model of the US labor market, we show that these programs have important labor market mobility effects and increase the self-employment rate. They also significantly impact the composition and performance outcomes of self-employment: while lump-sum subsidies select low-skilled individuals, SEA programs contingent on previously employed earnings select skilled and wealthier individuals. At the aggregate level, the latter programs mainly reallocate individuals from employment to self-employment, leaving the unemployment rate largely unaffected

Economic growth · Economics · Entrepreneurship · Labour economics · Self employed · Self-employment · Unemployment · Employment and Welfare Studies · Labor market dynamics and wage inequality · Retirement, Disability, and Employment

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