The Post‐Reform Effectiveness of the New German Start‐Up Subsidy for the Unemployed

27 Pages Posted: 9 Aug 2018

See all articles by Lutz Bellmann

Lutz Bellmann

Institute for Employment Research (IAB); Institute for the Study of Labor (IZA)

Marco Caliendo

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

Stefan Tübbicke

University of Potsdam

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Date Written: September 2018

Abstract

The current German start‐up subsidy for unemployed individuals underwent a major reform in 2011 that altered key parameters of the program, leading to ambiguous ex ante predictions on the post‐reform effectiveness of the program, making a new evaluation necessary. In our descriptive analysis, we find that participants after the reform differ significantly from pre‐reform participants in terms of important characteristics and subsequent labor market performance. Our causal analysis reveals positive and sizable treatment effects on the treated regarding employment and income that are larger effects than what was estimated for the pre‐reform program. Potential reasons for this are discussed.

Suggested Citation

Bellmann, Lutz and Caliendo, Marco and Tübbicke, Stefan, The Post‐Reform Effectiveness of the New German Start‐Up Subsidy for the Unemployed (September 2018). LABOUR, Vol. 32, Issue 3, pp. 293-319, 2018. Available at SSRN: https://ssrn.com/abstract=3228203 or http://dx.doi.org/10.1111/labr.12126

Lutz Bellmann (Contact Author)

Institute for Employment Research (IAB) ( email )

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Nuremberg, 90478
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Institute for the Study of Labor (IZA)

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

Marco Caliendo

University of Potsdam ( email )

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Potsdam, 14482
Germany
+49(0)331/9773225 (Phone)
+49(0)331/9773210 (Fax)

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

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

Stefan Tübbicke

University of Potsdam

August-Bebel Strasse 89
Potsdam, 14482
Germany

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