Small Business Economics

, Volume 38, Issue 2, pp 231–258 | Cite as

Determinants of self-employment survival in Europe

  • José María Millán
  • Emilio Congregado
  • Concepción Román


This paper investigates the determinants of self-employment survival in Europe in two stages. The first one focuses on the effect of variables at the individual level, while the second raises questions regarding specific regional factors through the introduction of macro variables. In conducting this analysis, discrete choice models, including both single and competing risks frameworks, are applied to data drawn from the European Community Household Panel from 1994 to 2001. Different destination states are considered: paid employment, unemployment and inactivity. This allows us to search for the underlying determinants of these different hazards. The results suggest a positive impact on survival of formal education and previous experience within the labour market. In addition, we find that entering self-employment from unemployment has a strong negative effect on survival within self-employment. However, our results also show that the expenditure on start-up subsidies decreases the risk of exiting self-employment specifically for the group of individuals entering self-employment from unemployment. Therefore, the availability of these incentives might be seen by policymakers as not only a route to increase entry into self-employment, but also as an adequate instrument for equalising survival chances across individuals entering self-employment from unemployment and those entering with a different starting status.


Entrepreneurship Self-employment Survival Occupational choice Labour market policies Regulatory environment 

JEL Classifications

C41 J08 J24 J60 M13 



The authors would particularly like to thank the editor, Rui Baptista, two anonymous referees, Javier Álvarez, José I. García, Juan A. Máñez, María E. Rochina and Juan A. Sanchis for their helpful comments and suggestions. They also thank Raquel Carrasco, Jolanda Hessels, Simon Parker, Roy Thurik, Mirjam van Praag, André van Stel, Peter van der Zwan and participants at a Max-Planck-Institut für Ökonomik Seminar (Jena 2005), the XI Spring Meeting of Young Economists (Sevilla 2006), the IX Applied Economics Meeting (Oviedo 2006) and the I Workshop on Applied Entrepreneurship Research (Huelva 2008). This research is part of the project PRY115/09, which has been funded by the Fundación Centro de Estudios Andaluces (5th announcement for research projects grants). The usual disclaimer applies.

Supplementary material

11187_2010_9260_MOESM1_ESM.doc (411 kb)
Supplementary material 1 (DOC 499 kb)


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Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  • José María Millán
    • 1
  • Emilio Congregado
    • 1
  • Concepción Román
    • 1
  1. 1.Universidad de HuelvaHuelvaSpain

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