Fritsch, Michael Kritikos, Alexander Pijnenburg, Katharina
Year of Publication:
Jena Economic Research Papers No. 2013-011
We investigate whether people become more willingly self-employed during boom periods or in recessions and to what extent it is the business cycle or the employment status influencing entry rates into entrepreneurship. Our analysis for Germany reveals that start-up activities are positively influenced by unemployment rates and that the cyclical component of real GDP has a negative effect. This implies that new business formation is counter-cyclical. Further disentangling periods of low and high unemployment periods reveals a low unemployment retard effect.
business cycle self-employment start-up unemployment