The Effect of Structural Welfare Policies on the Individual Perception of Personal Risk in Entrepreneurship: What is the Role of Welfare States in Mitigating Personal Risks and Promoting Entrepreneurship?

Jasmin Stamer & Michael Alexander Coleman-Larsen

Student thesis: Master thesis

Abstract

This thesis studies the effect welfare policy has on the individual perception of personal risks regarding entrepreneurship. It is hypothesized that the more governments spend on the welfare of citizens, and hence on covering their basic needs, the more personal risks are mitigated. In effect, governments encourage more entrepreneurship by ensuring social security and protection against basic risks. We outline the problematic lack of a holistic understanding of entrepreneurship. A gap in the literature, which has been identified delimits this thesis’ approach to entrepreneurship. We approach the gap, by conducting a quantitative analysis of OECD and EU data. Multilevel logistic models will be used to discern a relationship between social expenditure (OECD) and individual attitudes towards personal perceptions of risks. Our Analysis suggests, that some evidence towards the mitigation of risks does in fact exist. While we are unable to determine the strength of this relationship, we show that welfare spending increases an individual’s perceived feasibility of entrepreneurship, which in turn suggests a mitigation of personal risks. We then discuss our results and other interesting findings: one’s membership of distinct social groups seems to be of importance. We further discuss the potential inefficiency of welfare spending and psychological and heuristic decision theory. We conclude with explanations of our findings, and how to possibly improve on the research in the future.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages99
SupervisorsSusana Borrás