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Entry Regulation and Entrepreneurship

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  • Rostam-Afschar, Davud

Abstract

I exploit the amendment to the German Trade and Crafts Code in 2004 as a natural experiment to asses the causal effects of this reform on the probabilities of being self-employed and of transition into and out of self-employment using repeated cross sections (2002-2006) of German Microcensus data. I apply the Difference-in-Differences technique in logit models for four occupational groups. The results show that easing the educational entry requirement has fostered self-employment significantly for craftsmen after the reform by increasing the entry probability substantially, while exit rates remained unaffected. Similar, but weaker effects are found for the other occupational groups.

Suggested Citation

  • Rostam-Afschar, Davud, 2012. "Entry Regulation and Entrepreneurship," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62067, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc12:62067
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    References listed on IDEAS

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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
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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