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Of Mice and Unemployed: Rethinking Micro-Enterprise & Small-Business Policies in the EU

Publication Policy notes

The paper discusses the complex relationship between firm size and job creation in the EU which shows that there is a need to better understand the dynamics of the job creation and job destruction process. Promoting jobs through self-employment and small businesses is an alternative strategy that carries high hopes and brings a lot of policy attention to the theory that small businesses create the majority of jobs in the economy. However, despite widespread support for small business startups – from entry to the growth dynamics in the first years of existence – their role for job creation is not well understood and the policies may be following the wrong prescriptions.