ABSTRACT
This chapter examines the actual or threatened unemployment to self-employment. It reviews the evidence on the scale of the movement. The chapter presents some results of a survey of people made redundant who subsequently set up in business on their own account. There can be little doubt that the redundancies acted as a major stimulus to self-employment. The decision to move into self-employment for most of the founders who would have set up anyway had been directly affected by factors closely associated with the redundancy, such as the absence of promotion prospects and uncertainty about future employment. Although responses to interview questions are subject to numerous limitations, it is reasonably clear that the effect of the redundancy on the setting up decision was substantial. Redundancy may, as suggested, be taken as a signal of declining market prospects and therefore of reduced expected self-employment returns.
