Entry Regulation and Entrepreneurship: Empirical Evidence from a German Natural Experiment

Davud Rostam-Afschar

No 1065, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: The amendment to the German Trade and Crafts Code in 2004 offers a natural experiment to asses the causal effects of this reform on the probabilities of being self-employed and transition into and out of self-employment, using cross-sections (2002-2006) of German microcensus data. This study applies the difference-in-differences technique in logit models for four occupational groups. Easing the educational entry requirement has fostered self-employment significantly for less qualified craftsmen, almost doubling the entry probability, even as exit rates remained unaffected. Weaker effects occur for other occupational groups. These findings have implications for the design of regulations with educational requirements.

Keywords: Regulation; Entrepreneurship; Educational entry requirement; Natural experiment; Craftsmanship (search for similar items in EconPapers)
JEL-codes: I28 J24 L51 M13 (search for similar items in EconPapers)
Pages: 37 p.
Date: 2010
New Economics Papers: this item is included in nep-ent, nep-ind and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Entry regulation and entrepreneurship: a natural experiment in German craftsmanship (2014)
Working Paper: Entry Regulation and Entrepreneurship (2012)
Working Paper: Entry regulation and entrepreneurship: Empirical evidence from a German natural experiment (2010)
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