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Entry regulation and entrepreneurship: Empirical evidence from a German natural experiment

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  • Rostam-Afschar, Davud

Abstract

The amendment to the German Trade and Crafts Code in 2004 offers a natural experiment to asses the causal effects of this reform on the probabilities of being self-employed and transition into and out of self-employment, using cross-sections (2002-2006) of German microcensus data. This study applies the difference-in-differences technique in logit models for four occupational groups. Easing the educational entry requirement has fostered self-employment significantly for less qualified craftsmen, almost doubling the entry probability, even as exit rates remained unaffected. Weaker effects occur for other occupational groups. These findings have implications for the design of regulations with educational requirements. --

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Bibliographic Info

Paper provided by Free University Berlin, School of Business & Economics in its series Discussion Papers with number 2010/24.

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Date of creation: 2010
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Handle: RePEc:zbw:fubsbe:201024

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Keywords: Regulation; Entrepreneurship; Educational entry requirement Natural experiment; Craftsmanship;

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  1. Simeon Djankov & Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 2002. "The Regulation Of Entry," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 1-37, February.
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Cited by:
  1. Rostam-Afschar, Davud, 2012. "Entry Regulation and Entrepreneurship," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62067, Verein für Socialpolitik / German Economic Association.

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