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Personality traits and the evaluation of start-up subsidies

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  • Caliendo, Marco
  • Künn, Steffen
  • Weißenberger, Martin

Abstract

Many countries support business start-ups to spur economic growth and reduce unemployment with different programmes. Evaluation studies of such programmes commonly rely on the conditional independence assumption (CIA), allowing a causal interpretation of the results only if all relevant variables affecting participation and success are accounted for. While the entrepreneurship literature has emphasised the important role of personality traits as predictors for start-up decisions and business success, these variables were neglected in evaluation studies so far due to data limitations. In this paper, we evaluate a new start-up subsidy for unemployed individuals in Germany using propensity score matching under the CIA. Having access to rich administrative-survey data allows us to incorporate usually unobserved personality measures in the evaluation and investigate their impact on the estimated effects. We find strong positive effects on labour market reintegration and earned income for the new programme. Most importantly, results including and excluding individuals׳ personalities do not differ significantly, implying that concerns about potential overestimation of programme effects in the absence of personality measures might be less justified if the set of other control variables is rich enough.

Suggested Citation

  • Caliendo, Marco & Künn, Steffen & Weißenberger, Martin, 2016. "Personality traits and the evaluation of start-up subsidies," European Economic Review, Elsevier, vol. 86(C), pages 87-108.
  • Handle: RePEc:eee:eecrev:v:86:y:2016:i:c:p:87-108
    DOI: 10.1016/j.euroecorev.2015.11.008
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    1. repec:gam:jsusta:v:10:y:2018:i:7:p:2510-:d:158566 is not listed on IDEAS
    2. Moritz Zöllner & Michael Fritsch & Michael Wyrwich, 2016. "An Evaluation of German Active Labor Market Policies and its Entrepreneurship Promotion," Jena Economic Research Papers 2016-022, Friedrich-Schiller-University Jena.
    3. Christine Dauth & Ott Toomet, 2016. "On Government-Subsidized Training Programs for Older Workers," LABOUR, CEIS, vol. 30(4), pages 371-392, December.
    4. Lang, Julia & Dauth, Christine, 2017. "Should the unemployed care for the elderly? The effect of subsidized occupational and further training in geriatric care," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168130, Verein für Socialpolitik / German Economic Association.
    5. Dauth, Christine & Lang, Julia, "undated". "Should the unemployed care for the elderly? : The effect of subsidized occupational and further training in elderly care," IAB Discussion Paper 201713, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Moral-Arce, Ignacio & Martín-Román, Javier & Martín-Román, Ángel L., 2018. "Cessation of activity benefit of Spanish self-employed workers: a heterogeneous impact evaluation," MPRA Paper 85111, University Library of Munich, Germany.

    More about this item

    Keywords

    Start-up subsidies; Evaluation; Self-employment; Personality; Treatment effects;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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