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

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Author Info

  • Fritsch, Michael

    ()
    (University of Jena)

  • Kritikos, Alexander S.

    ()
    (University of Potsdam, DIW Berlin)

  • Rusakova, Alina

    ()
    (University of Jena)

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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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6326.

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Length: 52 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6326

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

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References

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  1. Poschke, Markus, 2008. "Who Becomes an Entrepreneur? Labor Market Prospects and Occupational Choice," IZA Discussion Papers 3816, Institute for the Study of Labor (IZA).
  2. Marco Caliendo & Alexander S. Kritikos, 2009. "Die reformierte Gründungsförderung für Arbeitslose - Chancen und Risiken," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(2), pages 189-213, 05.
  3. Caliendo, Marco & Künn, Steffen, 2011. "Start-up subsidies for the unemployed: Long-term evidence and effect heterogeneity," Journal of Public Economics, Elsevier, vol. 95(3-4), pages 311-331, April.
  4. David Audretsch, 2009. "The entrepreneurial society," The Journal of Technology Transfer, Springer, vol. 34(3), pages 245-254, June.
  5. Marco Caliendo & Frank Fossen & Alexander Kritikos, 2009. "Risk attitudes of nascent entrepreneurs–new evidence from an experimentally validated survey," Small Business Economics, Springer, vol. 32(2), pages 153-167, February.
  6. Simon C. Parker & Yacine Belghitar, 2006. "What Happens to Nascent Entrepreneurs? An Econometric Analysis of the PSED," Small Business Economics, Springer, vol. 27(1), pages 81-101, August.
  7. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
  8. 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).
  9. Marco Caliendo & Alexander S. Kritikos, 2008. "Start-Ups by the Unemployed: Characteristics, Survival and Direct Employment Effects," Working Papers 008, Hanseatic University, Germany, Department of Economics.
  10. Michael Fritsch, 2011. "The effect of new business formation on regional development - Empirical evidence, interpretation, and avenues for further research," Jena Economic Research Papers 2011-006, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  11. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, April.
  12. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
  13. May-Strobl, Eva & Pahnke, André & Schneck, Stefan & Wolter, Hans-Jürgen, 2011. "Selbstständige in der Grundsicherung," Working Papers 02/11, Institut für Mittelstandsforschung (IfM) Bonn.
  14. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  15. 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, vol. 8(2), pages 3-6, 07.
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Citations

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Cited by:
  1. Michael Fritsch & Michael Wyrwich, 2012. "The Long Persistence of Regional Entrepreneurship Culture: Germany 1925–2005," Papers in Evolutionary Economic Geography (PEEG) 1214, Utrecht University, Section of Economic Geography, revised Jul 2012.
  2. Alina Sorgner & Michael Fritsch, 2013. "Occupational Choice and Self-Employment - Are They Related?," Jena Economic Research Papers 2013-001, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  3. 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.
  4. 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.
  5. Michael Fritsch & Alexander Kritikos & Alina Sorgner, 2013. "Drivers of Self-Employment - A Multivariate Decomposition Analysis for the Case of Germany," Jena Economic Research Papers 2013-006, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  6. Michael Fritsch & Alina Rusakova, 2012. "Self-Employment after Socialism: Intergenerational Links, Entrepreneurial Values, and Human Capital," SOEPpapers on Multidisciplinary Panel Data Research 456, DIW Berlin, The German Socio-Economic Panel (SOEP).
  7. Michael Fritsch & Alina Sorgner, 2013. "Stepping Forward: Personality Traits, Choice of Profession, and the Decision to Become Self-Employed," Jena Economic Research Papers 2013-004, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  8. Michael Fritsch & Alina Sorgner, 2013. "Entrepreneurship and Creative Professions - A Micro-Level Analysis," Jena Economic Research Papers 2013-005, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  9. Kay, Rosemarie & Schneck, Stefan, 2012. "Hemmnisse und Probleme bei Gründungen durch Migranten," IfM-Materialien 214, Institut für Mittelstandsforschung (IfM) Bonn.
  10. 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 2012-042, 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. 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).
  13. Alina Sorgner, 2012. "A Physician With A Soul Of A Cook? Entrepreneurial Personality Across Occupations," Jena Economic Research Papers 2012-063, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  14. 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).

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