Small Business Economics

, Volume 49, Issue 4, pp 889–918 | Cite as

Active labor market programs’ effects on entrepreneurship and unemployment

  • Catherine LaffineurEmail author
  • Saulo Dubard Barbosa
  • Alain Fayolle
  • Emeran Nziali


Many countries are turning to active labor market programs (ALMP) to increase individuals’ incentive to start a business and to reduce unemployment, but research on the effectiveness of such programs has produced mixed results and is still inconclusive at the macroeconomic level. This article examines the importance of ALMP targeted at entrepreneurship to explain cross-country differences in aggregate entrepreneurship rate. By using GEM data over the period 2002–2013 on OECD countries, our results show a positive impact of ALMP on the rate of necessity entrepreneurship but no significant effect on the rate of opportunity entrepreneurship. We further established that generous unemployment benefits reduce the positive outcome of ALMP on the aggregate rate of necessity entrepreneurship. Moreover, because most businesses started out of necessity do not create new jobs, we find that the economic spin-off of such programs in terms of unemployment reduction is very limited.


Entrepreneurship Active labor market programs Start-up incentives Unemployment benefits Unemployment 

JEL classifications

M21 J65 H50 

Supplementary material

11187_2017_9857_MOESM1_ESM.docx (17 kb)
ESM 1 (DOCX 17 kb)


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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  • Catherine Laffineur
    • 1
    • 2
    Email author
  • Saulo Dubard Barbosa
    • 2
  • Alain Fayolle
    • 2
  • Emeran Nziali
    • 2
  1. 1.Université Côte d’Azur, GREDEG-CNRSNiceFrance
  2. 2.EM LyonEcullyFrance

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