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Entry Regulation and Entrepreneurship


  • Rostam-Afschar, Davud


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," 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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    Cited by:

    1. Jacques Pelkmans & Andrea Renda, "undated". "Does EU Regulation Hinder or Stimulate Innovation?," IRMO Occasional Papers 5, Institute for Development and International Relations, Zagreb.
    2. Koffi Elitcha & Raquel Fonseca, 2016. "Self-Employment, Wealth and Start-up Costs: Evidence from a Financial Crisis," Cahiers de recherche 1607, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
    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.
    4. Koch, Andreas & Nielen, Sebastian, 2016. "Ökonomische Wirkungen der Handwerksnovelle 2004: Ergebnisse aus einem quasinatürlichen Experiment," Working Papers 07/16, Institut für Mittelstandsforschung (IfM) Bonn.
    5. Frank M. Fossen & Ray Rees & Davud Rostam-Afschar & Viktor Steiner, 2017. "How Do Entrepreneurial Portfolios Respond to Income Taxation?," Discussion Papers of DIW Berlin 1673, DIW Berlin, German Institute for Economic Research.
    6. Jacob Hörisch & Jana Kollat & Steven A. Brieger, 2017. "What influences environmental entrepreneurship? A multilevel analysis of the determinants of entrepreneurs’ environmental orientation," Small Business Economics, Springer, vol. 48(1), pages 47-69, January.
    7. Pourya Darnihamedani & Joern Hendrich Block & Jolanda Hessels & Aram Simonyan, 2015. "Start-up Costs, Taxes and Innovative Entrepreneurship," Tinbergen Institute Discussion Papers 15-013/VII, Tinbergen Institute.
    8. repec:kap:sbusec:v:49:y:2017:i:2:d:10.1007_s11187-017-9838-x is not listed on IDEAS
    9. Pelkmans, Jacques & Renda, Andrea, 2014. "Does EU regulation hinder or stimulate innovation?," CEPS Papers 9822, Centre for European Policy Studies.
    10. repec:bpj:pewipo:v:18:y:2017:i:1:p:72-85:n:4 is not listed on IDEAS

    More about this item

    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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