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Who Starts a Business and Who Is Self-Employed in Germany

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  • Michael Fritsch
  • Alexander S. Kritikos
  • Alina Rusakova

Abstract

Based on representative data, the German Micro-Census, we provide an overview of the development of self-employment and entrepreneurship in Germany between 1991 and 2010, the first two decades after reunification. We investigate the socioeconomic background of these individuals, their education, previous employment status, and their income level. We observe a unique increase in self-employment in Germany by 40 percent which can partly be attributed to the transformation process of East Germany and to the shift to the service sector. We notice a yearly start-up rate of 1 percent among the working population (almost 20 percent of them being restarters), a decision that pays for the majority of individuals in terms of income. Contrary to other countries, in Germany there is a positive relationship between educational levels and the probability of starting a business.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.391994.de/dp1184.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1184.

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Length: 49 p.
Date of creation: 2012
Date of revision:
Handle: RePEc:diw:diwwpp:dp1184

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Keywords: Entrepreneurship; self-employment; start-ups; Germany;

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References

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  1. Caliendo, Marco & Fossen, Frank M. & Kritikos, Alexander S., 2006. "Risk Attitudes of Nascent Entrepreneurs: New Evidence from an Experimentally Validated Survey," Discussion Papers 252, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
  2. Poschke, Markus, 2013. "Who becomes an entrepreneur? Labor market prospects and occupational choice," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 37(3), pages 693-710.
  3. Caliendo, Marco & Künn, Steffen, 2010. "Start-Up Subsidies for the Unemployed: Long-Term Evidence and Effect Heterogeneity," IZA Discussion Papers 4790, Institute for the Study of Labor (IZA).
  4. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 13(4), pages 421-440, December.
  5. Marco Caliendo & Alexander S. Kritikos, 2009. "Die reformierte Gründungsförderung für Arbeitslose: Chancen und Risiken," Discussion Papers of DIW Berlin 856, DIW Berlin, German Institute for Economic Research.
  6. David Audretsch, 2009. "The entrepreneurial society," The Journal of Technology Transfer, Springer, Springer, vol. 34(3), pages 245-254, June.
  7. David B. Audretsch, 2007. "From small business promotion to creating an entrepreneurial society," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 8(2), pages 3-6, 07.
  8. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
  9. Marco Caliendo & Alexander S. Kritikos, 2008. "Start-Ups by the Unemployed: Characteristics, Survival and Direct Employment Effects," Working Papers, Hanseatic University, Germany, Department of Economics 008, Hanseatic University, Germany, Department of Economics.
  10. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521728355.
  11. Simon C. Parker & Yacine Belghitar, 2006. "What Happens to Nascent Entrepreneurs? An Econometric Analysis of the PSED," Small Business Economics, Springer, Springer, vol. 27(1), pages 81-101, August.
  12. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(3), pages 604-631, June.
  13. Burke, Andrew & FitzRoy, Felix & Nolan, Michael A., 2006. "What Makes a Die-Hard Entrepreneur? Beyond the ‘Employee or Entrepreneur’ Dichotomy," IZA Discussion Papers 2307, Institute for the Study of Labor (IZA).
  14. May-Strobl, Eva & Pahnke, André & Schneck, Stefan & Wolter, Hans-Jürgen, 2011. "Selbstständige in der Grundsicherung," Working Papers 02/11, Institut für Mittelstandsforschung (IfM) Bonn.
  15. Michael Fritsch, 2011. "The effect of new business formation on regional development - Empirical evidence, interpretation, and avenues for further research," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2011-006, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
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Citations

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Cited by:
  1. Anne-Kristin Kuhnt & Heike Trappe, 2013. "Easier said than done: childbearing intentions and their realization in a short term perspective," MPIDR Working Papers WP-2013-018, Max Planck Institute for Demographic Research, Rostock, Germany.
  2. Michael Fritsch & Alina Rusakova, 2012. "Self-Employment after Socialism: Intergenerational Links, Entrepreneurial Values, and Human Capital," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2012-022, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  3. Michael Fritsch & Elisabeth Bublitz & Alina Rusakova & Michael Wyrwich, 2012. "How Much of a Socialist Legacy? The Reemergence of Entrepreneurship in the East German Transformation to a Market Economy," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2012-042, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  4. Kay, Rosemarie & Schneck, Stefan, 2012. "Hemmnisse und Probleme bei Gründungen durch Migranten," IfM-Materialien 214, Institut für Mittelstandsforschung (IfM) Bonn.
  5. Michael Fritsch & Michael Wyrwich, 2012. "The Long Persistence of Regional Entrepreneurship Culture: Germany 1925 - 2005," Discussion Papers of DIW Berlin 1224, DIW Berlin, German Institute for Economic Research.
  6. Michael Fritsch & Alina Sorgner, 2013. "Entrepreneurship and Creative Professions: A Micro-Level Analysis," SOEPpapers on Multidisciplinary Panel Data Research 538, DIW Berlin, The German Socio-Economic Panel (SOEP).
  7. Sorgner, Alina & Fritsch, Michael, 2013. "Stepping Forward: Personality Traits, Choice of Profession, and the Decision to Become Self-Employed," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79768, Verein für Socialpolitik / German Economic Association.
  8. Caliendo, Marco & Künn, Steffen & Wießner, Frank, 2012. "Report No. 48: Der Gründungszuschuss in Brandenburg: Eine regionale Analyse," IZA Research Reports 48, Institute for the Study of Labor (IZA).
  9. Pahnke, André & May-Strobl, Eva & Schneck, Stefan, 2014. "Die Einkommenssituation von Selbstständigen und die Inanspruchnahme staatlicher Leistungen auf Basis des SGB II," IfM-Materialien 226, Institut für Mittelstandsforschung (IfM) Bonn.
  10. Alina Sorgner & Michael Fritsch, 2013. "Occupational Choice and Self-Employment - Are They Related?," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2013-001, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  11. Simoes, Nadia & Moreira, Sandrina B. & Crespo, Nuno, 2013. "Individual Determinants of Self-Employment Entry – What Do We Really Know?," MPRA Paper 48403, University Library of Munich, Germany.
  12. Alina Sorgner, 2012. "A Physician With A Soul Of A Cook? Entrepreneurial Personality Across Occupations," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2012-063, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  13. Michael Fritsch & Alexander Kritikos & Alina Sorgner, 2013. "Drivers of Self-Employment - A Multivariate Decomposition Analysis for the Case of Germany," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2013-006, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  14. Fritsch, Michael & Kritikos, Alexander S. & Pijnenburg, Katharina, 2013. "Business Cycles, Unemployment and Entrepreneurial Entry: Evidence from Germany," IZA Discussion Papers 7852, Institute for the Study of Labor (IZA).

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