Who Starts a Business and Who is Self-Employed in Germany

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. January 2012 Terms of use: Documents in AbstractBased on representative data, the German Micro-Census, we provide an overview of the development of self-employment and entrepreneurship in Germany between 1991 and 2011, the first two decades after reunification. We investigate the socioeconomic background of these individuals, their education, previous employment status, and their income level. We observe a unique increase in self-employment in Germany by 40 percent which can partly be attributed to the transformation process of East Germany and to the shift to the service sector. We notice a yearly start-up rate of 1 percent among the working population (almost 20 percent of them being restarters), a decision that pays for the majority of individuals in terms of income. Contrary to other countries, in Germany there is a positive relationship between educational levels and the probability of starting a business.

Business cycles, unemployment and entrepreneurial entry—evidence from Germany

“…identify in which quarter of the year the start-up took place (for more details on this data source, see Statistisches Bundesamt, 2009 Moreover, the statistics do not capture those business founders who entered and exited self-employment between two waves (Fritsch, Kritikos and Rusakova, 2012). Despite these shortcomings, the MicroCensus can be regarded as an appropriate data source for the analysis of self-employment in Germany.…”

“…However, looking at the characteristics of firms at the time of the establishment without a further analysis of start-up performance over the first two or three years may lead to false conclusions. We know from previous panel data analyses in Germany that a certain share of individuals starting as solo-entrepreneurs create further jobs after the venturing of the business, many in the first year (see Fritsch, Kritikos and Rusakova, 2012), even if they come out of unemployment Fritsch, 2013). For this reason, it is plausible to assume that it is not only the business cycle affecting new business formation but also that increased start-up activity may feed-back to the macro-economic level by stimulating economic development (see Koellinger and Thurik, 2012).…”

Self-Employment after Socialism: Intergenerational Links, Entrepreneurial Values, and Human Capital

“…However, it took until 2005-15 years-before the selfemployment rate in East Germany matched that of West Germany (Fritsch et al, 2012b). Despite a now slightly higher level of self-employment in East Germany, the characteristics of the new businesses in terms of industry affiliation, survival, and number of employees are quite different between the two regions.…”

Entrepreneurship and creative professions—a micro-level analysis

“…For instance, Shane (2000) shows that many entrepreneurs create ideas for their new business ventures based on their previous knowledge and their familiarity with the field where they start their venture. The observation that the majority of transitions into self-employment occur after a longer spell of dependent employment (Fritsch, Kritikos and Rusakova , 2012) points to the crucial role of work experience for the accumulation of knowledge and other entrepreneurship-related resources. Accordingly, Fritsch and Falck (2007) find that people often set up their businesses in the industry where they have been previously employed.…”

“…Our empirical analysis is based on the German Socio-Economic Panel (Fritsch, Kritikos and Rusakova, 2012).…”