Start-up Subsidies in Sweden : Treatment, Deadweight and Direct Displacement Effects.

Abstract

In this paper, we evaluate the Swedish self-employment program using data from administrative records about matched groups of program participants and nonparticipants. We find that participating in the program reduces the duration of unemployment and the risk for re-unemployment. The self-employment scheme is not found to result in a significant reduction of jobs elsewhere in the economy whereas the study estimates displacement effects in the order of 35 percent from the compound of other Swedish labor market programs. According to previous Swedish survey investigations self-reported deadweight in the self-employment scheme varies across studies from about 30 to about 45 percent.