Brown Bag Seminar - Ivan Žilić, Ph.D.

We invite you to the 22nd Brown Bag Seminar to be held on Thursday, Jan. 23, 2020, at the Faculty of Economics and Business in Zagreb in Hall 51 starting at 2 pm. The cycle of the Brown Bag Seminars will be continued by Mr. Ivan Žilić from the Zagreb Institute of Economics, who will present the paper "Lessons from the incentive for self-employment in the long recession" (co-author: Stjepan Srhoj).
Mr. Ivan Žilić is a research associate at the Institute of Economics, Zagreb and an external associate at the LSE Center for Southeast Europe. He graduated from the Faculty of Economics & Business in Zagreb, received his master's degree from the Carlos III University in Madrid, and his doctorate from the Johannes Kepler University in Linz. He is researching the economics of work, education and health, all from a microeconometric perspective.
Summary of the presentation:
The paper assesses the impact of self-employment incentives for the unemployed - measures designed to facilitate the first year of employment for unemployed people who choose to enter self-employment - on the survival and growth of open-ended firms, as well as on the reintegration of the unemployed into the Croatian labor market from 2010 to 2017. Although self-employment incentives offered a moderate amount of funding, up to 50% of the average annual gross wage, and absorbed only 5% of the funds allocated to active employment policy measures, nearly 10% of the total number of new businesses opened during the period under review. Using the register of individual episodes of unemployment, as well as the register of firms and trades, we document the effect of self-employment incentives, causally and descriptively. Using the longitudinal structure of the unemployment register where a person can be tracked over time, we found that an unemployed individual who completes his episode through a self-employment incentive is significantly less likely to return to unemployment. Also, we found that firms with open incentives have lower growth measured in terms of revenue and number of employees, while crafts - although a significant proportion of them close after the mandatory 12 months - have a more favorable market survival profile. Although the results are in line with other empirical literature on incentives for self-employment, we also find that the effectiveness of these grants has increased over the years, pointing towards institutional learning.