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A replication of ‘Entry regulation and entrepreneurship: a natural experiment in German craftsmanship’

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  • Runst, Petrik
  • Thomä, Jörg
  • Haverkamp, Katarzyna
  • Müller, Klaus

Abstract

Rostam-Afschar (2014) analyzes the impact of the deregulation of the German Trade and Crafts Code of 2004 on entrepreneurial activity, using German microcensus (MC) data. He finds a positive effect on market entry and self-employment and no change in exit probabilities. As these results partially conflict with company registry data, we re-examine the causal effects. Most importantly, we generate a novel classification scheme that aims to achieve an improved identification of crafts trades. Non-craftsmen need to be removed from the analysis as the policy change exclusively pertains to the crafts sector. In contrast to Rostam-Afschar’s findings, the increase in self-employment and entry is more pronounced in the completely deregulated B-trades rather than the partially deregulated A-trades. In addition, exit probabilities do not remain constant but rather increase. Our results are in line with company registry data.

Suggested Citation

  • Runst, Petrik & Thomä, Jörg & Haverkamp, Katarzyna & Müller, Klaus, 2017. "A replication of ‘Entry regulation and entrepreneurship: a natural experiment in German craftsmanship’," ifh Working Papers 2 (2017), Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh), revised 2017.
    • Handle: RePEc:zbw:ifhwps:22017
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    References listed on IDEAS

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    1. James J. Heckman & Rodrigo Pinto, 2015. "Econometric Mediation Analyses: Identifying the Sources of Treatment Effects from Experimentally Estimated Production Technologies with Unmeasured and Mismeasured Inputs," Econometric Reviews, Taylor & Francis Journals, vol. 34(1-2), pages 6-31, February.
    2. Aretz Bodo & Gregory Terry & Arntz Melanie, 2013. "The Minimum Wage Affects Them All: Evidence on Employment Spillovers in the Roofing Sector," German Economic Review, De Gruyter, vol. 14(3), pages 282-315, August.
    3. Davud Rostam-Afschar, 2014. "Entry regulation and entrepreneurship: a natural experiment in German craftsmanship," Empirical Economics, Springer, vol. 47(3), pages 1067-1101, November.
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    Cited by:

    1. Katarzyna Haverkamp, 2019. "Das Handwerk - Zur definitorischen und statistischen Abgrenzung eines Querschnittsbereichs," ZfKE – Zeitschrift für KMU und Entrepreneurship, Duncker & Humblot, Berlin, vol. 67(1), pages 67-79.

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    Keywords

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    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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