Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80620
Authors: 
Caliendo, Marco
Künn, Steffen
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7460
Abstract: 
Recent microeconometric evaluation studies have shown that start-up subsidies for unemployed individuals are an effective policy tool to improve long-term employment and income prospects of participants, in particular compared to other active labor market programs (e.g. training, job search assistance or job creation schemes). What has not been examined yet are the potentially heterogeneous effects of start-up programs across regional labor markets. Labor demand side restrictions in areas with relatively bad labor market conditions generally increase entries into start-up programs as job offers are limited and starting an own business is an opportunity to leave unemployment. However, the survival of firms in deprived areas is also lower, such that the overall effect remains an empirical question. We use a combination of administrative and survey data and observe participants in two distinct start-up programs in Germany for five years after start-up as well as a control group of unemployed who did not enter these programs. We add information on unemployment rates and GDP per capita at the labor agency district level to distinguish regional labor markets. Using propensity score matching methods we find supportive evidence that the founding process and development of businesses as well as program effectiveness is influenced by prevailing economic conditions at start-up.
Subjects: 
start-up subsidies
evaluation
effect heterogeneity
regional effects
self-employment
JEL: 
J68
R11
C14
H43
L26
Document Type: 
Working Paper

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