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Self-Employment: A Way to End Unemployment? Empirical Evidence from German Pseudo-Panel Data

Author

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  • Glocker, Daniela

    (CEP, London School of Economics)

  • Steiner, Viktor

    (Free University of Berlin)

Abstract

This paper contributes to the policy-relevant question whether self-employment is a way out of (long-term) unemployment. We estimate the relationship between the entry rate into self-employment and previous (long-term) unemployment on the basis of pseudo-panel data for Germany in the period 1996-2002. The estimation method accounts for cohort fixed effects and measurement errors induced by the pseudo panel structure. We find that previous (long-term) unemployment significantly increases entry rates into self-employment for both men and women. These effects are quantitatively important, both in absolute terms and compared to other potential determinants of self-employment transitions, such as age, the level of vocational qualification and certain household characteristics.

Suggested Citation

  • Glocker, Daniela & Steiner, Viktor, 2007. "Self-Employment: A Way to End Unemployment? Empirical Evidence from German Pseudo-Panel Data," IZA Discussion Papers 2561, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2561
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    Cited by:

    1. Milo Bianchi, 2012. "Financial Development, Entrepreneurship, and Job Satisfaction," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 273-286, February.
    2. Göggel Kathrin & Gräb Johannes & Pfeiffer Friedhelm, 2007. "Selbständigkeit in Europa 1991–2003: Empirische Evidenz mit Länderdaten / Self-Employment in 15 European Countries 1991–2003," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 227(2), pages 153-167, April.
    3. Giuliano Guerra & Roberto Patuelli & Rico Maggi, 2012. "Ethnic concentration, cultural identity and immigrant self-employment in Switzerland," Chapters, in: Peter Nijkamp & Jacques Poot & Mediha Sahin (ed.), Migration Impact Assessment, chapter 4, pages 147-171, Edward Elgar Publishing.
    4. Cynthia Sin Tian Ho & Björn Berggren, 2020. "The effect of bank branch closures on new firm formation: the Swedish case," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(2), pages 319-350, October.
    5. George Saridakis & Anne-Marie Mohammed & Jesús M. García-Iglesias & Rebeca I. Muñoz Torres, 2018. "Economy and Divorces: Their Impact Over Time on the Self-Employment Rates in Spain," Journal of Family and Economic Issues, Springer, vol. 39(3), pages 422-435, September.
    6. Aysit Tansel & H. Mehmet Taşçı, 2010. "Hazard Analysis of Unemployment Duration by Gender in a Developing Country: The Case of Turkey," LABOUR, CEIS, vol. 24(4), pages 501-530, December.
    7. Halicioglu, Ferda & Yolac, Sema, 2015. "Testing the impact of unemployment on self-employment: empirical evidence from OECD countries," MPRA Paper 65026, University Library of Munich, Germany.
    8. repec:dau:papers:123456789/5067 is not listed on IDEAS
    9. Michaelides, Marios, 2010. "Race and self-employment: The role of training programs, self-employment background, and access to financing," MPRA Paper 20884, University Library of Munich, Germany.
    10. Michaelides Marios & Davis Scott, 2020. "From unemployment to self-employment: The role of entrepreneurship training," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-35, March.
    11. P. Taylor, Mark, 2011. "Self-employment flows and persistence: a European comparative analysis," ISER Working Paper Series 2011-26, Institute for Social and Economic Research.
    12. Block, Joern & Kohn, Karsten, 2011. "Sozialpolitische Ziele der Gründungsförderung am Beispiel von Gründungen aus der Arbeitslosigkeit [Social policy as a motivation for start-up subsidies: supporting start-ups out of unemployment]," MPRA Paper 30775, University Library of Munich, Germany.
    13. Gaillard, Alexandre & Kankanamge, Sumudu, 2018. "Entrepreneurship, Labor Market Mobility and the Role of Entrepreneurial Insurance," TSE Working Papers 18-929, Toulouse School of Economics (TSE), revised Jan 2019.
    14. repec:jns:jbstat:v:227:y:2007:i:2:p:153-167 is not listed on IDEAS
    15. Michaelides, Marios & Benus, Jacob, 2012. "Are self-employment training programs effective? Evidence from Project GATE," Labour Economics, Elsevier, vol. 19(5), pages 695-705.
    16. Peter Thompson, 2011. "Necessity and Opportunity Entrepreneurs through the Business Cycle," Working Papers 1102, Florida International University, Department of Economics.
    17. Conen, Wieteke & Schippers, Johannes Jan & Schulze Buschoff, Karin, 2016. "Self-employed without personnel between freedom and insecurity," WSI Studies 05, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    18. Marios Michaelides, 2017. "Nascent Entrepreneurship and Race: Evidence from the GATE Experiment," University of Cyprus Working Papers in Economics 02-2017, University of Cyprus Department of Economics.
    19. Marios Michaelides & Scott Davis, 2016. "From unemployment to self-employment: the role of entrepreneurship training," University of Cyprus Working Papers in Economics 09-2016, University of Cyprus Department of Economics.

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    More about this item

    Keywords

    self-employment; entrepreneurship; entry rate; start-ups; unemployment; pseudo-panel; age and cohort effects;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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