Business Cycles, Unemployment and Entrepreneurial Entry: First Evidence from Germany

Michael Fritsch (), Alexander Kritikos and Katharina Pijnenburg

No 1281, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: 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".

Keywords: Self-employment; business cycle; unemployment; start-up (search for similar items in EconPapers)
JEL-codes: E32 L26 (search for similar items in EconPapers)
Pages: 25 p.
Date: 2013
New Economics Papers: this item is included in nep-bec and nep-sbm
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Citations: View citations in EconPapers (12)

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Working Paper: Business Cycles, Unemployment and Entrepreneurial Entry - First Evidence from Germany (2013)
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