Advanced Search
MyIDEAS: Login to save this paper or follow this series

Start-Ups by the Unemployed: Characteristics, Survival and Direct Employment Effects

Contents:

Author Info

  • Caliendo, Marco

    ()
    (University of Potsdam)

  • Kritikos, Alexander S.

    ()
    (University of Potsdam, DIW Berlin)

Abstract

Fostering and supporting start-up businesses by unemployed persons has become an increasingly important issue in many European countries. These new ventures are being supported by various governmental programs. Potential benefits include not only the end of unemployment for the new entrepreneur but also some further positive effects, e.g., direct job creation. However, it is often feared that the previously unemployed lack the basic qualifications to become entrepreneurs. Empirical evidence on skill-composition, direct job creation and other key variables is rather scarce, largely because of inadequate data availability. We base our analysis on a unique and very informative survey data containing a representative sample of over 3,100 start-ups founded by unemployed persons in Germany. Individuals were subsidized under two different schemes, and we are able to draw on extensive pre- and post-founding information concerning the characteristics of the business (start-up capital, industry, etc.) and of the business founders (education, motivation, preparation, etc.). We find that formerly unemployed founders are motivated by push and pull factors. Using a proportional hazard duration model with unobserved heterogeneity allows us to analyze the characteristics which drive success of the businesses. While survival rates 2.5 years after business founding are quite high (around 70%) for both programs and genders, the characteristics of the newly developed businesses are heterogeneous.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp3220.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3220.

as in new window
Length: 35 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:iza:izadps:dp3220

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: self-employment; start-up subsidies; unemployment; direct employment effects; survival;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 16(1), pages 26-60, January.
  2. Marco Caliendo & Frank Fossen & Alexander Kritikos, 2009. "Risk attitudes of nascent entrepreneurs–new evidence from an experimentally validated survey," Small Business Economics, Springer, Springer, vol. 32(2), pages 153-167, February.
  3. Blanchflower, David G. & Oswald, Andrew J., 2007. "What Makes a Young Entrepreneur?," IZA Discussion Papers 3139, Institute for the Study of Labor (IZA).
  4. Marco Caliendo & Alexander S. Kritikos, 2007. "Die reformierte Gründungsförderung für Arbeitslose: Chancen und Risiken," Working Papers, Gesellschaft für Arbeitsmarktaktivierung (GfA) 0009, Gesellschaft für Arbeitsmarktaktivierung (GfA).
  5. Baumgartner, Hans J. & Caliendo, Marco, 2007. "Turning Unemployment into Self-Employment: Effectiveness and Efficiency of Two Start-Up Programmes," IZA Discussion Papers 2660, Institute for the Study of Labor (IZA).
  6. Pernilla Andersson & Eskil Wadensjö, 2007. "Do the unemployed become successful entrepreneurs?," International Journal of Manpower, Emerald Group Publishing, Emerald Group Publishing, vol. 28(7), pages 604-626, November.
  7. Josef Zweimuller & Rudolf Winter-Ebmer, 1999. "Firm-Size Wage Differentials in Switzerland: Evidence from Job-Changers," American Economic Review, American Economic Association, American Economic Association, vol. 89(2), pages 89-93, May.
  8. Pfeiffer, Friedhelm & Reize, Frank, 1998. "Business Start-ups by the Unemployed - an Econometric Analysis Based on Firm Data," ZEW Discussion Papers 98-38, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  9. Marco Caliendo & Viktor Steiner, 2005. "Aktive Arbeitsmarktpolitik in Deutschland: Bestandsaufnahme und Bewertung der mikroökonomischen Evaluationsergebnisse," Discussion Papers of DIW Berlin 515, DIW Berlin, German Institute for Economic Research.
  10. Udo Brixy & Susanne Kohaut & Claus Schnabel, 2007. "Do Newly Founded Firms Pay Lower Wages? First Evidence from Germany," Small Business Economics, Springer, Springer, vol. 29(1), pages 161-171, June.
  11. Simon Parker & Mirjam van Praag, 2004. "Schooling, Capital Constraints and Entrepreneurial Performance," Tinbergen Institute Discussion Papers 04-106/3, Tinbergen Institute, revised 07 Mar 2005.
  12. Fritsch, Michael & Mueller, Pamela, 2006. "The effect of new business formation on regional development over time: the case of Germany," Freiberg Working Papers 2006,13, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
  13. Michael Fritsch, 2008. "How does new business formation affect regional development? Introduction to the special issue," Small Business Economics, Springer, Springer, vol. 30(1), pages 1-14, January.
  14. Robert Fairlie, 2005. "Entrepreneurship and Earnings among Young Adults from Disadvantaged Families," Small Business Economics, Springer, Springer, vol. 25(3), pages 223-236, October.
  15. Michael Fritsch & Antje Weyh, 2006. "How Large are the Direct Employment Effects of New Businesses? An Empirical Investigation for West Germany," Small Business Economics, Springer, Springer, vol. 27(2), pages 245-260, October.
  16. Eichhorst, Werner & Zimmermann, Klaus F, 2007. "And Then There Were Four... How Many (and Which) Measures of Active Labour Market Policy Do We Still Need?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6246, C.E.P.R. Discussion Papers.
  17. Fritsch, Michael, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Freiberg Working Papers 2004,09, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
  18. 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.
  19. Franz Kronthaler, 2005. "Economic capability of East German regions: Results of a cluster analysis," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 39(6), pages 739-750.
  20. Audretsch, David & Vivarelli, Marco, 1995. "New-firm formation in Italy: A first report," Economics Letters, Elsevier, Elsevier, vol. 48(1), pages 77-81, April.
  21. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2005. "Comparative analysis of firm demographics and survival: evidence from micro-level sources in OECD countries," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 365-391, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3220. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.