Effects of human capital and regional context on entrepreneurial survival

The aim of this paper is to analyse self-employment survival, with special interest in the role of human capital and regions. Using Spanish administrative data and multilevel models, we followed two cohorts of new entrepreneurs for 2 years. According to our findings, the survival rate of new entrants into self-employment is approximately 53%, with this rate decreasing during the economic downturn by ten points. The results for both cohorts underline the necessity of considering personal and contextual factors in elaborating policy recommendations on entrepreneurship. Young workers and those with lower levels of informal human capital have low survival rates, so they need stronger support. The estimations also offer evidence of the relevance of regions. The inherent characteristics of regions contribute to explaining the survival of new start-ups. Again, the design of entrepreneurial policies should take into account these results. Additionally, the reason for entering self-employment seems to be more relevant in times of crisis.