CEPR recently came out with an important study that shows the United States has a much smaller small-business sector (as a share of total employment) than other countries at a comparable level of economic development.
Mark Thoma commented on CEPR's recent study
There's another factor that could also be contributing besides competitive disadvantages with countries that have government funded health care systems. A more extensive social safety net can reduce the risk of attempts at entrepreneurship. If there is an extensive social safety net to fall back upon if things don't work out, you might be more willing to quit the job you hate (the one with health insurance for the kids) and sink everything you have into a small business that you've always wanted to run. But I'm not sure the data above support this interpretation, i.e. that there is an obvious positive association between the strength of social insurance and the prevalence of small business. But it is highly suggestive, and regressions that control for other cross-country differences could help to settle the issue. In any case, one thing is clear, according to these measurements the US has low numbers relative to other countries in the sample.
To get a stronger small-business sector we need to get conservative Republicans like Lynn Westmoreland and Steve Davis out of the way. We need to be empowering our entrepreneurs.
Its time to leave ideology at the ivory tower doors and keep our focus on pragmatic policy based in the realities of our political system and what modern industrialized nations require to flourish; rather than Utopian ideals or empty claims with no basis in the historical record.
No comments:
Post a Comment