IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v35y2010i1p71-92.html

Some searches may not work properly. We apologize for the inconvenience.

   My bibliography  Save this article

Start-ups by the unemployed: characteristics, survival and direct employment effects

Author

Listed:
  • Marco Caliendo
  • Alexander Kritikos

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marco Caliendo & Alexander Kritikos, 2010. "Start-ups by the unemployed: characteristics, survival and direct employment effects," Small Business Economics, Springer, vol. 35(1), pages 71-92, July.
    • Handle: RePEc:kap:sbusec:v:35:y:2010:i:1:p:71-92
    DOI: 10.1007/s11187-009-9208-4
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11187-009-9208-4
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11187-009-9208-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pernilla Andersson & Eskil Wadensjö, 2007. "Do the unemployed become successful entrepreneurs?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 28(7), pages 604-626, October.
    2. Blanchflower, D. & Oswald, A., 1990. "What Makes A Young Entrepreneur?," Papers 373, London School of Economics - Centre for Labour Economics.
    3. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    4. 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, May.
    5. 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.
    6. Audretsch, David & Vivarelli, Marco, 1995. "New-firm formation in Italy: A first report," Economics Letters, Elsevier, vol. 48(1), pages 77-81, April.
    7. Michael Fritsch, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Journal of Evolutionary Economics, Springer, vol. 14(5), pages 525-542, December.
    8. Franz Kronthaler, 2005. "Economic capability of East German regions: Results of a cluster analysis," Regional Studies, Taylor & Francis Journals, vol. 39(6), pages 739-750.
    9. 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.
    10. Parker, Simon C. & van Praag, C. Mirjam, 2006. "Schooling, Capital Constraints, and Entrepreneurial Performance: The Endogenous Triangle," Journal of Business & Economic Statistics, American Statistical Association, vol. 24, pages 416-431, October.
    11. 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.
    12. Marco Caliendo & Viktor Steiner, 2005. "Aktive Arbeitsmarktpolitik in Deutschland: Bestandsaufnahme und Bewertung der mikroökonomischen Evaluationsergebnisse," Discussion Papers of DIW Berlin 515, DIW Berlin, German Institute for Economic Research.
    13. Josef Zweimuller & Rudolf Winter-Ebmer, 1999. "Firm-Size Wage Differentials in Switzerland: Evidence from Job-Changers," American Economic Review, American Economic Association, vol. 89(2), pages 89-93, May.
    14. 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 and the Associazione ICC, vol. 14(3), pages 365-391, June.
    15. Hans J. Baumgartner & Marco Caliendo, 2008. "Turning Unemployment into Self‐Employment: Effectiveness of Two Start‐Up Programmes," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(3), pages 347-373, June.
    16. 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.
    17. Levenson, Alec R & Willard, Kristen L, 2000. "Do Firms Get the Financing They Want? Measuring Credit Rationing Experienced by Small Business in the U.S," Small Business Economics, Springer, vol. 14(2), pages 83-94, March.
    18. 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.
    19. Pernilla Andersson & Eskil Wadensjö, 2007. "Do the unemployed become successful entrepreneurs?," International Journal of Manpower, Emerald Group Publishing, vol. 28(7), pages 604-626, November.
    20. Michael Fritsch, 2008. "How does new business formation affect regional development? Introduction to the special issue," Small Business Economics, Springer, vol. 30(1), pages 1-14, January.
    21. 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? ; Finding a Balance after the Evaluation of the Hartz Reforms in Germany," Discussion Papers of DIW Berlin 685, DIW Berlin, German Institute for Economic Research.
    22. 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.
    23. Robert Fairlie, 2005. "Entrepreneurship and Earnings among Young Adults from Disadvantaged Families," Small Business Economics, Springer, vol. 25(3), pages 223-236, October.
    24. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Enrico Santarelli & Marco Vivarelli, 2007. "Entrepreneurship and the process of firms’ entry, survival and growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 16(3), pages 455-488, June.
    2. Román, Concepción & Congregado, Emilio & Millán, José María, 2013. "Start-up incentives: Entrepreneurship policy or active labour market programme?," Journal of Business Venturing, Elsevier, vol. 28(1), pages 151-175.
    3. Marco Vivarelli, 2013. "Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(6), pages 1453-1495, December.
    4. Marco Vivarelli, 2012. "Entrepreneurship and Post-Entry Performance: the Microeconomic Evidence," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1286, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    5. Vivarelli, Marco, 2012. "Drivers of entrepreneurship and post-entry performance : microeconomic evidence from advanced and developing countries," Policy Research Working Paper Series 6245, The World Bank.
    6. Vivarelli, Marco, 2012. "Entrepreneurship in Advanced and Developing Countries: A Microeconomic Perspective," IZA Discussion Papers 6513, Institute of Labor Economics (IZA).
    7. Francesco Quatraro & Marco Vivarelli, 2015. "Drivers of Entrepreneurship and Post-entry Performance of Newborn Firms in Developing Countries," The World Bank Research Observer, World Bank, vol. 30(2), pages 277-305.
    8. 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.
    9. C. Praag & Peter Versloot, 2007. "What is the value of entrepreneurship? A review of recent research," Small Business Economics, Springer, vol. 29(4), pages 351-382, December.
    10. Magnus Lofstrom, 2013. "Does self-employment increase the economic well-being of low-skilled workers?," Small Business Economics, Springer, vol. 40(4), pages 933-952, May.
    11. 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), pages 311-331.
    12. Michael Fritsch & Alexandra Schroeter, 2011. "Why does the effect of new business formation differ across regions?," Small Business Economics, Springer, vol. 36(4), pages 383-400, May.
    13. Oberschachtsiek, Dirk, 2010. "How do local labor market conditions and individual characteristics affect quitting selfemployment?," Discussion Papers, Presidential Department P 2010-001, WZB Berlin Social Science Center.
    14. Dirk Oberschachtsiek, 2012. "The experience of the founder and self-employment duration: a comparative advantage approach," Small Business Economics, Springer, vol. 39(1), pages 1-17, July.
    15. Francesco Quatraro & Marco Vivarelli, 2013. "Entry and Post-Entry Dynamics in Developing Countries," GREDEG Working Papers 2013-20, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    16. Quatraro, Francesco & Vivarelli, Marco, 2013. "Entrepreneurship In A Developing Country Context," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201314, University of Turin.
    17. Milo Bianchi, 2012. "Financial Development, Entrepreneurship, and Job Satisfaction," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 273-286, February.
    18. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    19. Monika Mühlböck & Julia-Rita Warmuth & Marian Holienka & Bernhard Kittel, 2018. "Desperate entrepreneurs: no opportunities, no skills," International Entrepreneurship and Management Journal, Springer, vol. 14(4), pages 975-997, December.
    20. Yvonne Schindele & Michael Fritsch & Florian Noseleit, 2011. "Micro-level Evidence on the Survival of German Manufacturing Industries - A Multidimensional Analysis (refereed paper)," ERSA conference papers ersa10p549, European Regional Science Association.

    More about this item

    Keywords

    Start-up subsidies; Self-employment; Unemployment; Direct employment effects; Survival; J68; M13; L26;
    All these keywords.

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:sbusec:v:35:y:2010:i:1:p:71-92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.