Entrepreneurship Insurance

According to a new National Bureau of Economic Research working paper, we should be paying more attention to the down-side risks when it comes to fostering entrepreneurship.

The new paper, by economists John Hombert and David Thesmar of HEC Paris, David Sraer of the University of California-Berkeley, and Antoinette Schoar of the Massachusetts Institute of Technology, looks at a reform in the French unemployment insurance system enacted in 2002. The reform allowed unemployed workers who start a new business to keep the right to their unemployment benefits for up to three years. They could use the accrued benefits to make up the difference between their business’s revenue and the level of benefits they would have otherwise received.

The four researchers find that the policy change acted as a sort of entrepreneurship insurance. Workers who before would have been hesitant to start a business may be more likely to do so now that they had some protection against downside risk. The new paper documents that the rate at which firms were created increased by 25 percent after the 2002 reform.

Great many things to be done around fostering entrepreneurship. Medicare-for-all, free college or vocational training programs are a good start. UBI deserves closer attention, as well as the program described above.

Third Wave requires different ways of working, motivating; I always appreciated Richard Branson's ideas in this area, in his companies vacation time is unlimited, anyone is free to go on vacation anytime (but RB will also add, the company is free to fire you). It all comes down to the worker - how they can control what they can work on, when / how much they can vacation, etc. Gore Associates does a fine job distinguishing between leadership and management. No bosses.

Life is becoming more complicated, faster due to the knowledge age. There is no time to create that 2-3 level pyramid to disseminate, assign work spread information. This is not the industrial era, sure as shit not the time of the villager / farmer who toils on the patch of land, fucks sheep, dream to be noble, of the "select few", go to the Catholic Church and pay fealty to Rome. We are back to loosely connected, able,  free-styling forager -with a smartphone- who takes lots of risks, but this time, can be covered on the downside.