Arbeitspapier
Unemployment benefit duration and startup success
Despite the importance of business creation for the economy and a relevant share of new firms being started out of unemployment, most research has focused on analyzing the effect of unemployment insurance (UI) policies on reemployment outcomes that ignore self-employment. In this paper, we assess how UI benefit duration affects the motivation for creating a startup while unemployed and the subsequent firms' success. To do so, we create a comprehensive dataset on founders in Germany that links administrative social insurance with survey data. Exploiting reform- and age-based exogenous variations in potential benefit duration (PBD) within the German UI system, we find that longer PBD leads to longer actual unemployment duration for those becoming self-employed. Furthermore, the UI duration elasticity for these individuals is higher than common estimates for those individuals becoming re-employed. With increasing unemployment benefit duration, the founders' outcomes in terms of self-assessed motivation, sales, and employment growth lessen. This overall causal effect of PBD can be rationalized with a mix of composition and individual-level duration effects. Therefore, our findings suggest that it is important to consider the fiscal externality of UI on startup success when it comes to the (optimal) design of UI systems.
- Sprache
-
Englisch
- Erschienen in
-
Series: ZEW Discussion Papers ; No. 20-033
- Klassifikation
-
Wirtschaft
Firm Behavior: Empirical Analysis
Labor Force and Employment, Size, and Structure
Labor Demand
Professional Labor Markets; Occupational Licensing
Job, Occupational, and Intergenerational Mobility; Promotion
Unemployment: Models, Duration, Incidence, and Job Search
Unemployment Insurance; Severance Pay; Plant Closings
Production, Pricing, and Market Structure; Size Distribution of Firms
Firm Performance: Size, Diversification, and Scope
Entrepreneurship
New Firms; Startups
- Thema
-
entrepreneurship
unemployment insurance
fiscal externality
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Camarero Garcia, Sebastian
Murmann, Martin
- Ereignis
-
Veröffentlichung
- (wer)
-
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
- (wo)
-
Mannheim
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Camarero Garcia, Sebastian
- Murmann, Martin
- ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
Entstanden
- 2020
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