Allowance for Self-Employed Gainful Activity in Slovakia: A Closer look into the Factors Involved

Abstract

Research background: Active labour market policy measures serve to improve the situation with unemployment and the placeability of jobseekers in the labour market. An important tool for the functioning of these interventions is their continuous monitoring and evaluation. Purpose: In this paper, we focus on the Allowance for self-employment gainful activity aimed at providing the financial contribution to start a business. The paper aims to find out those jobseekers' characteristics that mostly increase the probability of participation in this intervention. Research methodology: We use data from the database of jobseekers of the Central Office of Labour, Social Affairs and Family in Slovakia, the probability model is constructed by a logistic regression. Results: We found several characteristics that significantly impact the decision to participate in the measure. Jobseekers with previous employment in service activities (NACE S), married, long-term unemployed and with a 2nd university degree have a higher chance of participating in this program of the labour market. On the contrary, high age, low education or permanent residence in the Bratislava region decreases the chance for participation in this intervention. Novelty: Knowing the individuals' characteristics that significantly contribute to the interest in participating in this program can help policymakers set the instrument's eligibility conditions and allocate funds to increase interest in using this treatment where necessary.