Personality Traits and the Evaluation of Start-Up Subsidies

57 Pages Posted: 7 Mar 2016

See all articles by Marco Caliendo

Marco Caliendo

University of Potsdam; Institute for the Study of Labor (IZA)

Steffen Künn

University of Potsdam

Martin Weißenberger

University of Potsdam

Multiple version iconThere are 2 versions of this paper

Date Written: January 2016

Abstract

Many countries support business start-ups to spur economic growth and reduce unemployment with different programmes. Evaluation studies of such programmes commonly rely on the conditional independence assumption (CIA), allowing a causal interpretation of the results only if all relevant variables affecting participation and success are accounted for. While the entrepreneurship literature has emphasised the important role of personality traits as predictors for start-up decisions and business success, these variables were neglected in evaluation studies so far due to data limitations. In this paper, we evaluate a new start-up subsidy for unemployed individuals in Germany using propensity score matching under the CIA. Having access to rich administrative-survey data allows us to incorporate usually unobserved personality measures in the evaluation and investigate their impact on the estimated effects. We find strong positive effects on labour market reintegration and earned income for the new programme. Most importantly, results including and excluding individuals’ personalities do not differ significantly, implying that concerns about potential overestimation of programme effects in absence of personality measures might be less justified if the set of other control variables is rich enough.

Keywords: start-up subsidies, evaluation, self-employment, personality, treatment effects

JEL Classification: C140, L260, H430, J680

Suggested Citation

Caliendo, Marco and Künn, Steffen and Weißenberger, Martin, Personality Traits and the Evaluation of Start-Up Subsidies (January 2016). CESifo Working Paper Series No. 5733. Available at SSRN: https://ssrn.com/abstract=2743213

Marco Caliendo (Contact Author)

University of Potsdam ( email )

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Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Steffen Künn

University of Potsdam ( email )

August-Bebel Strasse 89
Potsdam, 14482
Germany

Martin Weißenberger

University of Potsdam ( email )

August-Bebel Strasse 89
Potsdam, 14482
Germany

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