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Employment stability of entrants in newly founded firms : a matching approach using linked employer-employee data from Germany

  • Schnabel, Claus
  • Kohaut, Susanne

    ()

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Brixy, Udo

    ()

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

"Using a linked employer-employee dataset and taking the perspective of individuals rather than firms, this paper analyzes some effects of joining start-ups. We show that entrants in new firms differ from those joining incumbent firms, and we use a matching approach to compare a group of employees joining new firms in 1995/96 with a control group entering incumbent firms. Our results indicate that individuals' employment stability was higher in incumbent than in newly founded firms while their risk of becoming unemployed was lower. In particular in eastern Germany, joining firms that were older than six years was the best strategy." (Author's abstract, IAB-Doku) ((en))

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Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 200809.

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Length: 25 pages
Date of creation: 20 Feb 2008
Date of revision:
Publication status: published as: "Employment stability in newly founded firms : a matching approach using linked employer-employee data from Germany". In: Small Business Economics, Vol. 36, No. 1 (2011), p. 85-100
Handle: RePEc:iab:iabdpa:200809
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  1. Michael Fritsch & Pamela Mueller, 2004. "The Effects of New Business Formation on Regional Development over Time," Papers on Entrepreneurship, Growth and Public Policy 2004-36, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  2. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, June.
  3. Audretsch, David B. & van Leeuwen, George & Menkveld, Bert & Thurik, Roy, 2001. "Market dynamics in the Netherlands: Competition policy and the role of small firms," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 795-821, April.
  4. Heckmann, Markus & Schnabel, Claus, 2005. "Überleben und Beschäftigungsentwicklung neu gegründeter Betriebe," Discussion Papers 39, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  5. Grotz, Reinhold & Brixy, Udo, 2002. "Entry-rates, the share of surviving businesses and employment growth: differences between West and East Germany since unification," ERSA conference papers ersa02p175, European Regional Science Association.
  6. Dunne, T. & Roberts, M.J. & Samuelson, L., 1988. "The Growth And Failure Of U.S. Manufacturing Plants," Papers 1-87-5, Pennsylvania State - Department of Economics.
  7. Baldwin, John R. & Rafiquzzaman, Mohammed, 1995. "Selection versus evolutionary adaptation: Learning and post-entry performance," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 501-522, December.
  8. Smith, Jeffrey & Todd, Petra, 2005. "Rejoinder," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 365-375.
  9. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, June.
  10. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
  11. Brixy, Udo & Kohaut, Susanne & Schnabel, Claus, 2004. "Do newly founded firms pay lower wages? : first evidence from Germany," IAB Discussion Paper 200404, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  12. Audretsch, David B. & Mata, Jose, 1995. "The post-entry performance of firms: Introduction," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 413-419, December.
  13. Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 961-975.
  14. Brixy, Udo & Kohaut, Susanne, 1999. " Employment Growth Determinants in New Firms in Eastern Germany," Small Business Economics, Springer, vol. 13(2), pages 155-70, September.
  15. Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 19 Jan 2015.
  16. Vicenzo Quadrini & Claudio Michelacci, 2005. "Borrowing From Employees: Wage Dynamics With Financial Constraints," Working Papers wp2005_0501, CEMFI.
  17. Matthew Barnes & Jonathan Haskel, 2002. "Job Creation, Job Destruction and the Contribution of Small Businesses: Evidence for UK Manufacturing," Working Papers 461, Queen Mary University of London, School of Economics and Finance.
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