The global financial crisis of 2008 has affected all European economies, throwing most of them into a period of potentially prolonged period of slow growth and high levels of unemployment. In response, governments have reacted using a variety of policy tools to prevent the negative effects of crisis that have increasingly emphasized state support for entrepreneurial activities. At both national and supra-national levels, entrepreneurship was perceived as a key factor in helping restore economic growth and reduce unemployment. Hence it is crucial to understand whether and how policy responses to the recent crises have impacted entrepreneurs. In this paper we ask whether the economic crisis and the measures that accompanied it affected citizens' entrepreneurial attitudes and activities. To do so, we combine individual and macro-level data from 27 EU countries from 2006 to 2012 and test whether preferences for self-employment and entrepreneurial activity vary in response to contextual economic and policy factors. Results of multilevel models show that the negative effects of the crisis on entrepreneurial behaviour have been enhanced by regulatory failures. Specifically, we find that in countries that fared poorly in providing access to finance for Small and Medium Enterprises (SMEs), the economic crisis has decreased significantly the likelihood to start a business.
Dragos Adascalitei is a political economist interested in labour markets, industrial relations, and welfare reforms. Currently, he is based in Budapest at the Central European University’s Center for Policy Studies, where he is an Early Stage Researcher within the ChangingEmployment Marie Curie Initial Training Network.
His work has been published in Economic and Industrial Democracy, Social Policy and Administration, and International Social Security Review.