@article{CaliendoTuebbicke2021,
  author    = {Caliendo, Marco and T{\"u}bbicke, Stefan},
  title     = {Design and effectiveness of start-up subsidies},
  series = {Economic analysis and policy},
  volume    = {70},
  journal   = {Economic analysis and policy},
  publisher = {Elsevier},
  address   = {Amsterdam},
  issn      = {0313-5926},
  doi       = {10.1016/j.eap.2021.02.015},
  pages     = {333 -- 340},
  year      = {2021},
  abstract  = {While a growing body of literature finds positive impacts of Start-Up Subsidies (SUS) on labor market outcomes of participants, little is known about how the design of these programs shapes their effectiveness and hence how to improve policy. As experimental variation in program design is unavailable, we exploit the 2011 reform of the current German SUS program for the unemployed which strengthened caseworkers' discretionary power, increased entry requirements and reduced monetary support. We estimate the impact of the reform on the program's effectiveness using samples of participants and non-participants from before and after the reform. To control for time-constant unobserved heterogeneity as well as differential selection patterns based on observable characteristics over time, we combine Difference-in-Differences with inverse probability weighting using covariate balancing propensity scores. Holding participants' observed characteristics as well as macroeconomic conditions constant, the results suggest that the reform was successful in raising employment effects on average. As these findings may be contaminated by changes in selection patterns based on unobserved characteristics, we assess our results using simulation-based sensitivity analyses and find that our estimates are highly robust to changes in unobserved characteristics. Hence, the reform most likely had a positive impact on the effectiveness of the program, suggesting that increasing entry requirements and reducing support increased the program's impacts while reducing the cost per participant. (C) 2021 Economic Society of Australia, Queensland. Published by Elsevier B.V. All rights reserved.},
  language  = {en}
}
@article{CaliendoTuebbicke2019,
  author    = {Caliendo, Marco and T{\"u}bbicke, Stefan},
  title     = {New evidence on long-term effects of start-up subsidies},
  series = {Empirical economics},
  volume    = {59},
  journal   = {Empirical economics},
  number    = {4},
  publisher = {Physica-Verlag},
  address   = {Heidelberg},
  issn      = {0377-7332},
  doi       = {10.1007/s00181-019-01701-9},
  pages     = {1605 -- 1631},
  year      = {2019},
  abstract  = {The German start-up subsidy (SUS) program for the unemployed has recently undergone a major makeover, altering its institutional setup, adding an additional layer of selection and leading to ambiguous predictions of the program's effectiveness. Using propensity score matching (PSM) as our main empirical approach, we provide estimates of long-term effects of the post-reform subsidy on individual employment prospects and labor market earnings up to 40 months after entering the program. Our results suggest large and persistent long-term effects of the subsidy on employment probabilities and net earned income. These effects are larger than what was estimated for the pre-reform program. Extensive sensitivity analyses within the standard PSM framework reveal that the results are robust to different choices regarding the implementation of the weighting procedure and also with respect to deviations from the conditional independence assumption. As a further assessment of the results' sensitivity, we go beyond the standard selection-on-observables approach and employ an instrumental variable setup using regional variation in the likelihood of receiving treatment. Here, we exploit the fact that the reform increased the discretionary power of local employment agencies in allocating active labor market policy funds, allowing us to obtain a measure of local preferences for SUS as the program of choice. The results based on this approach give rise to similar estimates. Thus, our results indicating that SUS are still an effective active labor market program after the reform do not appear to be driven by "hidden bias."},
  language  = {en}
}
@article{CaliendoKuennWeissenberger2020,
  author    = {Caliendo, Marco and K{\"u}nn, Steffen and Weissenberger, Martin},
  title     = {Catching up or lagging behind?},
  series = {Research policy : policy, management and economic studies of science, technology and innovation},
  volume    = {49},
  journal   = {Research policy : policy, management and economic studies of science, technology and innovation},
  number    = {10},
  publisher = {Elsevier},
  address   = {Amsterdam},
  issn      = {0048-7333},
  doi       = {10.1016/j.respol.2020.104053},
  pages     = {14},
  year      = {2020},
  abstract  = {From an active labor market policy perspective, start-up subsidies for unemployed individuals are very effective in improving long-term labor market outcomes for participants. From a business perspective, however, the assessment of these public programs is less clear since they might attract individuals with low entrepreneurial abilities and produce businesses with low survival rates and little contribution to job creation, economic growth, and innovation. In this paper, we use a rich data set to compare participants of a German start-up subsidy program for unemployed individuals to a group of regular founders who started from non-unemployment and did not receive the subsidy. The data allows us to analyze their business performance up until 40 months after business formation. We find that formerly subsidized founders lag behind not only in survival and job creation, but especially also in innovation activities. The gaps in these business outcomes are relatively constant or even widening over time. Hence, we do not see any indication of catching up in the longer run. While the gap in survival can be entirely explained by initial differences in observable start-up characteristics, the gap in business development remains and seems to be the result of restricted access to capital as well as differential business strategies and dynamics. Considering these conflicting results for the assessment of the subsidy program from an ALMP and business perspective, policy makers need to carefully weigh the costs and benefits of such a strategy to find the right policy mix.},
  language  = {en}
}