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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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  3. 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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  6. Werner Eichhorst & Klaus F. Zimmermann, 2007. "And Then There Were Four...How Many (and Which) Measures of Active Labor Market Policy Do We Still Need?," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 53(3), pages 243-272.
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  7. Michael Fritsch & Pamela Mueller, 2008. "The effect of new business formation on regional development over time: the case of Germany," Small Business Economics, Springer, vol. 30(1), pages 15-29, January. [Downloadable!] (restricted)
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  10. Colombo, Massimo G. & Delmastro, Marco & Grilli, Luca, 2004. "Entrepreneurs' human capital and the start-up size of new technology-based firms," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1183-1211, November. [Downloadable!] (restricted)
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  15. C. Mirjam van Praag & Peter H. Versloot, 2007. "What is the Value of Entrepreneurship? A Review of Recent Research," Jena Economic Research Papers in Economics 2007-061, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
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  19. 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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  20. Meager, Nigel, 1992. " Does Unemployment Lead to Self-employment?," Small Business Economics, Springer, vol. 4(2), pages 87-103, June.
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  25. 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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(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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