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Getting Back into the Labor Market: The Effects of Start-Up Subsidies for Unemployed Females

  • Caliendo, Marco


    (University of Potsdam)

  • Künn, Steffen


    (Maastricht University)

A shortage of skilled labor and low female labor market participation are problems many developed countries have to face. Besides activating inactive women, one possible solution is to support the re-integration of unemployed women. Due to female-specific labor market constraints (preferences for flexible working hours, discrimination), this is a difficult task, and the question arises whether active labor market policies (ALMP) are an appropriate tool to do so. Promoting self-employment among the unemployed might be promising. Starting their own business might give women more independence and flexibility in allocating their time to work and family. Access to long-term informative data allows us to close existing research gaps, and we investigate the impact of two start-up programs on long-run labor market and fertility outcomes of female participants. We find that start-up programs persistently integrate former unemployed women into the labor market and partly improve their income situations. The impact on fertility is less detrimental than for traditional ALMP programs.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6830.

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Length: 43 pages
Date of creation: Aug 2012
Date of revision:
Publication status: published in: Journal of Population Economics, 2015, 28(4), 1005-1043
Handle: RePEc:iza:izadps:dp6830
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