Business Cycles, Unemployment and Entrepreneurial Entry: Evidence from Germany

Michael Fritsch (), Alexander Kritikos and Katharina Pijnenburg ()
Additional contact information
Katharina Pijnenburg: DIW Berlin

No 7852, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We investigate whether people are more willing to become self-employed during boom periods or during recessions and to what extent business cycles or unemployment levels influence entries into entrepreneurship. Our analysis for Germany reveals that there is a positive relationship between unemployment rates and start-up activities. Moreover, new business formation is higher during recessions than in boom periods. This implies that new business formation is counter-cyclical. When disentangling periods of low and high unemployment we find that the effect of unemployment on new business formation is only statistically significant if the level of unemployment is below the trend, indicating a "low unemployment retain effect".

Keywords: start-up; self-employment; business cycle; unemployment (search for similar items in EconPapers)
JEL-codes: E32 L26 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-12
New Economics Papers: this item is included in nep-bec, nep-ent, nep-mac and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published - published in: International Entrepreneurship and Management Journal, 2015, 11(2), 267-286

Downloads: (external link)
https://docs.iza.org/dp7852.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp7852

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().