Self-Employment Programs: A New Reemployment Tool

Abstract

The recently passed North American Free Trade Agreement (NAFTA) Includes Important provisions for U.S. unemployed workers who are interested in becoming self-employed. The provisions of this act allow states to establish self-employment assistance programs as part of their unemployment compensation system. This paper reports on two recent demonstrations, funded by the U.S. Department of Labor, to test the ability of the U.S. employment security and economic development systems to help unemployment insurance recipients start businesses. The results of these demonstrations have helped policymakers reach the conclusion that self-employment assistance programs are viable policy tools to promote the rapid reemployment of unemployed workers.