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How does entry regulation influence entry into self-employment and occupational mobility?

  • Susanne Prantl

    ()

    (Institute for Fiscal Studies and Max Plank Institute for Research on Collective Goods)

  • Alexandra Spitz-Oener

    (Institute for Fiscal Studies)

We analyze how an entry regulation that imposes a mandatory educational standard affects entry into self-employment and occupational mobility. We exploit the German reunification as a natural experiment and identify regulatory effects by comparing differences between regulated occupations and unregulated occupations in East Germany with the corresponding differences in West Germany after reunification. Consistent with our expectations, we find that entry regulation reduces entry into self-employment and occupational mobility after reunification more in regulated occupations in East Germany than in West Germany. Our findings are relevant for transition or emerging economies as well as for mature market economies requiring large structural changes after unforeseen economic shocks.

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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W09/14.

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Date of creation: Jul 2009
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Handle: RePEc:ifs:ifsewp:09/14
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