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Who Starts a Business and Who Is Self-Employed in Germany

  • Michael Fritsch
  • Alexander S. Kritikos
  • Alina Rusakova

Based on representative data, the German Micro-Census, we provide an overview of the development of self-employment and entrepreneurship in Germany between 1991 and 2010, the first two decades after reunification. We investigate the socioeconomic background of these individuals, their education, previous employment status, and their income level. We observe a unique increase in self-employment in Germany by 40 percent which can partly be attributed to the transformation process of East Germany and to the shift to the service sector. We notice a yearly start-up rate of 1 percent among the working population (almost 20 percent of them being restarters), a decision that pays for the majority of individuals in terms of income. Contrary to other countries, in Germany there is a positive relationship between educational levels and the probability of starting a business.

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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1184.

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Length: 49 p.
Date of creation: 2012
Date of revision:
Handle: RePEc:diw:diwwpp:dp1184
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  1. Marco Caliendo & Steffen Künn, 2010. "Start-up Subsidies for the Unemployed: Long-Term Evidence and Effect Heterogeneity," Discussion Papers of DIW Berlin 985, DIW Berlin, German Institute for Economic Research.
  2. David Audretsch, 2009. "The entrepreneurial society," The Journal of Technology Transfer, Springer, vol. 34(3), pages 245-254, June.
  3. Caliendo, Marco & Kritikos, Alexander S., 2007. "Start-Ups by the Unemployed: Characteristics, Survival and Direct Employment Effects," IZA Discussion Papers 3220, Institute for the Study of Labor (IZA).
  4. 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.
  5. David B. Audretsch, 2007. "From small business promotion to creating an entrepreneurial society," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 8(2), pages 3-6, 07.
  6. Caliendo, Marco & Kritikos, Alexander S., 2007. "Die reformierte Gründungsförderung für Arbeitslose: Chancen und Risiken," IZA Discussion Papers 3114, Institute for the Study of Labor (IZA).
  7. Poschke, Markus, 2008. "Who Becomes an Entrepreneur? Labor Market Prospects and Occupational Choice," IZA Discussion Papers 3816, Institute for the Study of Labor (IZA).
  8. Michael Fritsch, 2011. "The effect of new business formation on regional development - Empirical evidence, interpretation, and avenues for further research," Jena Economic Research Papers 2011-006, Friedrich-Schiller-University Jena.
  9. Simon C. Parker & Yacine Belghitar, 2006. "What Happens to Nascent Entrepreneurs? An Econometric Analysis of the PSED," Small Business Economics, Springer, vol. 27(1), pages 81-101, August.
  10. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
  11. 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.
  12. May-Strobl, Eva & Pahnke, André & Schneck, Stefan & Wolter, Hans-Jürgen, 2011. "Selbstständige in der Grundsicherung," Working Papers 02/11, Institut für Mittelstandsforschung (IfM) Bonn.
  13. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355.
  14. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
  15. Burke, Andrew & FitzRoy, Felix & Nolan, Michael A., 2006. "What Makes a Die-Hard Entrepreneur? Beyond the ‘Employee or Entrepreneur’ Dichotomy," IZA Discussion Papers 2307, Institute for the Study of Labor (IZA).
  16. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604.
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