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  • January 2021 Newsletter
 
Entrepreneurs can invigorate the economy.
View this email online
IZA World of Labor logo
Entrepreneurs and their impact on jobs and economic growth

Even in innovation-driven economies,
only 1–2% of the work force starts a business in any given year.

Entrepreneurship is important for a number of reasons: from promoting social change and stimulating new employment to driving innovation and helping accelerate economic development. Entrepreneurial businesses in particular enhance economic growth by introducing innovative technologies, products and services, and, entrepreneurs are equally, if not more, important when the economy is doing badly, according to Alexander S. Kritikos.

The Covid-19 pandemic has changed the trajectory of many businesses around the world as well as driven unemployment to a record high. However, as Kritikos writes, when unemployment is high and the economy is contracting or stagnating, dynamic entrepreneurship can help turn the economy around.

By developing novel products or increasing competition, new firms can boost demand, which could in turn create new job opportunities and reduce unemployment. If entrepreneurs are consistently encouraged, in difficult economic times as well as good, then all businesses are kept on their toes, motivated to work continuously to improve and adapt. Entrepreneurial activities may also influence a country’s economic performance by bringing new products, methods, and production processes to the market and by boosting productivity and competition more broadly.

Realizing these advantages requires institutions that contribute to an environment that is friendly to entrepreneurs. In particular, it is important to protect intellectual and other property rights, streamline and enforce commercial laws, improve the business climate, reduce regulatory burdens, and create a culture of second chances for entrepreneurs who fail. 

 

In order to find out what policy measures should be considered, read Alexander S. Kritikos' full article: 
Entrepreneurs and their impact on jobs and economic growth (Deutsch)

 
 
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As a valued subscriber, we would like to know what you think of our service and how we can make it more useful to you. As a token of our appreciation, we will enter you into a free prize draw to win £100 of books.
 

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Kind regards from the IZA World of Labor Team

 
 

Related opinion pieces and articles:

Immigrant entrepreneurship: The evidence so far

Immigrant entrepreneurship: The evidence so far

by Magnus Lofstrom

Immigrants and entrepreneurship

Immigrants and entrepreneurship (Deutsch) (Español)

by Magnus Lofstrom and Chunbei Wang

Entrepreneurship and the business cycle

Entrepreneurship and the business cycle (Deutsch)

by Roy Thurik

Latent entrepreneurship in transition economies

Latent entrepreneurship in transition economies (Deutsch)

by Hilal Atasoy

Entrepreneurship for the poor in developing countries

Entrepreneurship for the poor in developing countries (Deutsch)

by Yoonyoung Cho

Financing high-potential entrepreneurship

Financing high-potential entrepreneurship (Deutsch)

by Ramana Nanda

 
 

For commentary on the effects of Covid-19 see
Covid-19: Pandemics and the labor market.

See National responses to Covid-19 for expert perspectives on the effects of the pandemic on individual countries or cities.

 
 

Measuring income inequality

Editor-in-chief Professor Dan Hamermesh interviewed:

Measuring income inequality

Ija Trapeznikova

on measuring income inequality

Automation and the future of jobs

Stijn Broecke

on automation and the future of jobs

Income inequality and social origins

Lorenzo Cappellari

on income inequality and social origins

Inequality and informality in transition and emerging countries

Roberto Dell'Anno

on inequality and informality in transition and emerging countries

View the full playlist on inequality here.

 
 

View our interviews with IZA World of Labor contributors
on the impact of Covid-19 around the world.

 
 

Read our latest news stories:

2020 working hour losses were four times greater than during the ’09 financial crisis

2020 working hour losses were four times greater than during the ’09 financial crisis

8.8% of all work hours around the world were lost in 2020.

Does Covid-19 have a universal impact on domestic violence around the world?

Does Covid-19 have a universal impact on domestic violence around the world?

Cities like Cork in Ireland and Townsville, a coastal city in northeastern Queensland, Australia have reported an increase in cases of domestic violence during the pandemic..

What is women’s housework time worth?

What is women’s housework time worth?

A newly formed political party in India has promised to pay salaries to housewives if they are voted into power.

World’s richest already recouped their Covid losses while billions will live in poverty for a decade

World’s richest already recouped their Covid losses while billions will live in poverty for a decade

It could take more than a decade for the world’s poorest people to recover from the economic impact of the coronavirus pandemic.

Australia’s unemployment rate has dropped to 6.6%

Australia’s unemployment rate has dropped to 6.6%

30,000 more Australians have found work during the Covid-19 pandemic, causing the unemployment rate to drop to just over 6%.

Germany to require big companies have at least one woman on their boards

Germany to require big companies have at least one woman on their boards

The German cabinet has approved a new law that will require all large, publicly listed companies in the country to have at least one woman on their executive boards.

Businesses need to work on improving age diversity, CEO says

Businesses need to work on improving age diversity as they recover, CEO says

A multi-generational workforce will be vital for companies as thy recover from the Covid-19 pandemic.

Google’s new union seeks to influence social and economic issues

Google’s new union seeks to influence social and economic issues

In the first week of January, a group of workers at Google’s parent company formed the Alphabet Workers Union.

Half the pollution in the western US is caused by wildfires

Half the pollution in the western US is caused by wildfires

In recent years wildfire smoke has accounted for up to 50% of all health-damaging small particle air pollution in the western US.

 
 

Upcoming events:

 

  • SOLE's 26th Annual Meeting, May 14-15 2021 - Philadelphia, United States

  • World Employment Conference 2020: Steering a labour market in transformation, Sept 07-08 2021 - Madrid, Spain

  • 33rd Annual Conference of the European Association of Labour Economists, Sept 16-18 2021 - Padua, Italy

 
 

Read some of our recent commentaries:

Exposure to epidemics and trust in scientists

Exposure to epidemics and trust in scientists

Distrust of scientific experts is a problem, one that will be even more acute post Covid-19.

Measuring the effects of the Covid-19 pandemic on domestic violence

Measuring the effects of the Covid-19 pandemic on domestic violence

Around the world, policymakers and news reports have warned that domestic violence could increase as a result of the Covid-19 pandemic.

Assessing the effect of online instruction on university students’ learning

Assessing the effect of online instruction on university students’ learning

Despite learning losses from pandemic-induced disruptions, our findings leave us optimistic for future student learning.

Covid-19 and fertility

Covid-19 and fertility

An analysis of Google Trends data suggests that between November 2020 and February 2021 monthly US births will drop sharply, by approximately 15%.

Pandemic meets pollution: The role of air quality for COVID-19

Pandemic meets pollution: The role of air quality for Covid-19

Higher levels of air pollution increase the number of deaths.

How to play it safe? The gender gap in aversion to Covid-19 exposure

How to play it safe? The gender gap in aversion to Covid-19 exposure

Focusing on gender differences in labor market outcomes may underestimate the true gender impact of Covid-19

How was the US presidential election affected by the Covid-19 pandemic?

How was the US presidential election affected by the Covid-19 pandemic?

At least in the case of Covid-19 in the US, political leaders’ (mis-)handling of negative shocks matters to voters and elections.

The impact of a Covid-19 lockdown on happiness

The impact of a Covid-19 lockdown on happiness

Analyzing the well-being impact of Covid-19 is complex.

The impact of Covid-19 restrictions on small businesses in the US

The impact of Covid-19 restrictions on small businesses in the US

No group was immune to negative impacts of social distancing policy mandates and demand shifts.

What are lockdowns good for?

What are lockdowns good for?

Policymakers were left with few policy options to combat the spread of the virus and minimize the economic damage that it entailed.

Covid-19 and US attitudes toward government and markets

Covid-19 and US attitudes toward government and markets

Stay-at-home orders, mandated shutdowns, and relief packages that might have seemed unthinkable mere weeks before were adopted.

You can find more commentaries
on our opinion page

 
 

Articles relating to pandemics and the labor market:

  • Why does part-time employment increase in recessions? (Deutsch) (Español) by Daniel Borowczyk-Martins

  • Health effects of job insecurity (Deutsch) by Francis Green

  • Short-time work compensation schemes and employment (Deutsch) (Español) by Pierre Cahuc

  • Do youths graduating in a recession incur permanent losses? (Deutsch) (Español) by Bart Cockx

  • The relationship between recessions and health (Deutsch) by Nick Drydakis

  • Effects of entering adulthood during a recession (Deutsch) by Lisa Dettling

 
 

Latest articles
 

 

  • Correspondence testing studies (Deutsch) by Dan-Olof Rooth

  • Individual and family labor market impacts of chronic diseases (Deutsch) by Amanda Gaulke

  • The effect of overtime regulations on employment (Deutsch) by Ronald L. Oaxaca and Galiya Sagyndykova

  • Health effects of job insecurity (Deutsch) by Francis Green

  • Do immigrants improve the health of native workers? (Deutsch) by Osea Giuntella

  • Encouraging women’s labor force participation in transition countries (Deutsch) by Norberto Pignatti

  • Impacts of regulation on eco-innovation and job creation (Deutsch) by Jens Horbach

  • Public sector outsourcing (Deutsch) by Panu Poutvaara and Henrik Jordahl

  • Racial wage differentials in developed countries (Deutsch) by Simonetta Longhi 

  • What is the economic value of literacy and numeracy? (Deutsch) by Gemma Cherry and Anna Vignoles

  • Sports at the vanguard of labor market policy (Deutsch) by Kerry L. Papps

  • Integrating refugees into labor markets (Deutsch) by Pieter Bevelander

  • European asylum policy before and after the migration crisis (Deutsch) (Español) by Tim Hatton

  • Recruiting intensity (Deutsch) (Español) by R. Jason Faberman

  • Who benefits from firm-sponsored training? (Deutsch) (Español) by Benoit Dostie

  • Bonuses and performance evaluations (Deutsch) (Español) by Dirk Sliwka

  • Labor market performance and the rise of populism (Deutsch) (Español) by Sergei Guriev 

  • Are workers motivated by the greater good? (Deutsch) (Español) by Mirco Tonin

  • Skill-based immigration, economic integration, and economic performance (Deutsch) (Español) by Abdurrahman B. Aydemir

  • The labor market in Norway, 2000–2018 (Deutsch) by Øivind A. Nilsen

  • What is the nature and extent of student-university mismatch? (Deutsch) (Español) by Gillian Wyness and Richard Murphy

  • The impact of monitoring and sanctioning on unemployment exit and job-finding rates (Deutsch) (Español) by Duncan McVicar

  • The determinants of housework time (Deutsch) (Español) by Leslie S. Stratton

All one-pagers are also available to read and download in German.
Find out more.

One-pagers are now available in Spanish. Take a look at the
Spanish key topics page.

 
 

The Covid-19 pandemic is likely to have lasting economic and social impacts on employment, income, and working conditions in labor markets around the world.

IZA has therefore invited a number of experts to monitor individual countries' crisis responses on their
Crisis Response Monitoring site:

IZA Crisis Response Monitoring
 
 

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      Piotr Lewandowski, Iga Magda
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