Unemployment as a driver of entrepreneurship in Eastern and Western Germany

Christian Bergholz, Rolf Sternberg, Lennard Stolz and Johannes Bersch

Regional Studies, 2025, vol. 59, issue 1, 2511713

Abstract: This article investigates regional variation in the unemployment push in Germany during economic upswings. Using a dataset of 1.2 million business formations in an eight-year period, we analyse regional variation in the urban–rural dichotomy and differentiate between regions in capitalist Western and those in the formerly socialist Eastern Germany and account for regions’ economic situations. The intensity of the unemployment push increases with the level of rurality, and there is a stronger unemployment push in Western than in Eastern Germany. The latter can be attributed to differences in policy preferences regarding state reliance as tested by using voting patterns.

Date: 2025
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DOI: 10.1080/00343404.2025.2511713

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