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

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Marco Caliendo ()
Alexander S. Kritikos ()

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Abstract

Supporting start-ups by unemployed persons with governmental programs became an important issue as benefits could include termination of unemployment and further job creation. However, it is feared that previously unemployed lack qualifications for entrepreneurship. We analyze potential effects based on a data-set containing a representative sample of 3,100 start-ups founded by unemployed in Germany. We find that these 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 are high, the characteristics of the developed businesses are heterogeneous.

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Paper provided by Hanseatic University, Germany, Department of Economics in its series Working Papers with number 008.

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Length: 34 pages
Date of creation: Apr 2008
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Handle: RePEc:phu:wpaper:008

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  2. 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.
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  4. Udo Brixy & Susanne Kohaut & Claus Schnabel, 2007. "Do Newly Founded Firms Pay Lower Wages? First Evidence from Germany," Small Business Economics, Springer, vol. 29(1), pages 161-171, June. [Downloadable!] (restricted)
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  5. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July. [Downloadable!] (restricted)
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  6. C. Mirjam van Praag & Peter H. Versloot, 2007. "What is the Value of Entrepreneurship? A Review of Recent Research," Tinbergen Institute Discussion Papers 07-066/3, Tinbergen Institute. [Downloadable!]
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  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, vol. 27(2), pages 245-260, October. [Downloadable!] (restricted)
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  17. Carrasco, R., 1997. "Transitions to and from Self-Employment in Spain: An Empirical Analysis," Papers 9710, Centro de Estudios Monetarios Y Financieros-.
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  20. Robert Fairlie, 2005. "Entrepreneurship and Earnings among Young Adults from Disadvantaged Families," Small Business Economics, Springer, vol. 25(3), pages 223-236, October. [Downloadable!] (restricted)
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  24. Pfeiffer, Friedhelm & Reize, Frank, 2000. "Business start-ups by the unemployed -- an econometric analysis based on firm data," Labour Economics, Elsevier, vol. 7(5), pages 629-663, September. [Downloadable!] (restricted)
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(explanations, 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.)

  1. Caliendo, Marco, 2008. "Start-Up Subsidies in East Germany: Finally, a Policy that Works?," IZA Discussion Papers 3360, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Wolff, Joachim & Nivorozhkin, Anton, 2008. "Start me up: The effectiveness of a self-employment programme for needy unemployed people in Germany," IAB Discussion Paper 200820, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  3. Marco Caliendo & Alexander S. Kritikos, 2008. "Is Entrepreneurial Success Predictable? An Ex-Ante Analysis of the Character-Based Approach," Working Papers 001, Hanseatic University, Germany, Department of Economics. [Downloadable!]
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