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Start me up: The effectiveness of a self-employment programme for needy unemployed people in Germany

Author

Listed:
  • Wolff, Joachim

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

  • Nivorozhkin, Anton

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

Abstract

"In recent years activation of means-tested unemployment benefit recipients has become a major issue of European labour market policy. We study the effect of participation in a new business start-up scheme for needy unemployed people in Germany. The programme was introduced at the beginning of the year 2005 together with a new means-tested benefit system. We used data from administrative records to draw a sample of needy participants who entered the programme from February to April 2005 and of an adequate control group. Even though these data are quite rich in terms of information on the labour market performance and individual and household characteristics, they do not provide information on unsubsidised self-employment. Therefore, using matching methods we estimate the impact of the programme participation on the outcomes 'neither being registered as unemployed nor as a job-seeker' and 'no receipt of unemployment benefit II'. Our estimates imply that even by the time when nearly no participant receives the start-up subsidy any longer treatment reduces considerably the proportion of registered job-seekers and of means-tested benefit recipients among the treated. Moreover, there is no substantial variation of these effects over different population groups." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Wolff, Joachim & Nivorozhkin, Anton, 2008. "Start me up: The effectiveness of a self-employment programme for needy unemployed people in Germany," IAB Discussion Paper 200820, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  • Handle: RePEc:iab:iabdpa:200820
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    References listed on IDEAS

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    1. Martin Browning & Thomas F. Crossley & Eric F. Smith, 2007. "Asset Accumulation and Short Term Employment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 400-423, July.
    2. Noll, Susanne & Wolff, Joachim & Nivorozhkin, Anton, 2006. "Förderung mit dem Einstiegsgeld nach § 29 SGB II : erste Befunde zur Implementation und Deskription," IAB-Forschungsbericht 200623, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. 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.
    4. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    5. 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.
    6. Hohmeyer, Katrin & Wolff, Joachim, 2007. "A fistful of Euros: Does One-Euro-Job participation lead means-tested benefit recipients into regular jobs and out of unemployment benefit II receipt?," IAB Discussion Paper 200732, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Alberto Abadie & Guido W. Imbens, 2008. "On the Failure of the Bootstrap for Matching Estimators," Econometrica, Econometric Society, vol. 76(6), pages 1537-1557, November.
    8. 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.
    9. Begona Cueto & Javier Mato, 2006. "An analysis of self-employment subsidies with duration models," Applied Economics, Taylor & Francis Journals, vol. 38(1), pages 23-32.
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    12. Nigel Meager & Peter Bates & Marc Cowling, 2003. "An Evaluation of Business Start-Up Support for Young People," National Institute Economic Review, National Institute of Economic and Social Research, vol. 186(1), pages 59-72, October.
    13. Bernhard, Sarah & Wolff, Joachim, 2008. "Contracting out placement services in Germany : is assignment to private providers effective for needy job-seekers?," IAB Discussion Paper 200805, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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    Citations

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    Cited by:

    1. Marco Caliendo & Jens Hogenacker, 2012. "The German labor market after the Great Recession: successful reforms and future challenges," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-24, December.
    2. Fuchs, Michaela & Wesling, Mirko & Weyh, Antje, 2014. "Potenzialnutzung in Ostdeutschland : eine Analyse von Angebot und Nachfrage auf dem Arbeitsmarkt," IAB-Forschungsbericht 201406, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Bernhard, Sarah & Gartner, Hermann & Stephan, Gesine, 2008. "Wage subsidies for needy job-seekers and their effect on individual labour market outcomes after the German reforms," IAB Discussion Paper 200821, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Huber, Martin & Lechner, Michael & Walter, Thomas & Wunsch, Conny, 2009. "Do German Welfare-to-Work Programmes Reduce Welfare and Increase Work?," CEPR Discussion Papers 7238, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    berufliche Selbständigkeit; Hilfebedürftige; Sozialgesetzbuch II; Arbeitslosengeld II-Empfänger; Einstiegsgeld; arbeitsmarktpolitische Maßnahme - Erfolgskontrolle;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • 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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