Self-employment For The Unemployed: Experience In Oecd And Transitional Economies (world Bank Discussion Paper)

This study describes the self-employment programs in nine industrialized countries and two transitional economies, and explores how this experience has transferred to countries making the transition to market economies. The study shows that self-employment is not a panacea for unemployment. Less than five percent of the unemployed will choose to become employed. For those that choose this option, however, these programs are cost-effective alternatives to regular unemployment benefits. Credit is typically not featured in self-employment programs in industrialized countries with competitive capital markets. However, in transitional economies, where such markets are absent, access to credit is provided through the program. This study -- a cooperative effort between the Educational and Social Policy Department (ESP) and Country Department III of the Europe and Central Asia Region (EC3CO) -- is part of a larger effort in the Bank to examine labor market interventions that can reduce and redistribute more fairly the economic cost of structural adjustment.