@phdthesis{Weissenberger2017,
  author    = {Weißenberger, Martin},
  title     = {Start-up subsidies for the unemployed - New evaluation approaches and insights},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-406362},
  school      = {Universit{\"a}t Potsdam},
  pages     = {viii, 239},
  year      = {2017},
  abstract  = {Start-up incentives targeted at unemployed individuals have become an important tool of the Active Labor Market Policy (ALMP) to fight unemployment in many countries in recent years. In contrast to traditional ALMP instruments like training measures, wage subsidies, or job creation schemes, which are aimed at reintegrating unemployed individuals into dependent employment, start-up incentives are a fundamentally different approach to ALMP, in that they intend to encourage and help unemployed individuals to exit unemployment by entering self-employment and, thus, by creating their own jobs. In this sense, start-up incentives for unemployed individuals serve not only as employment and social policy to activate job seekers and combat unemployment but also as business policy to promote entrepreneurship. The corresponding empirical literature on this topic so far has been mainly focused on the individual labor market perspective, however. The main part of the thesis at hand examines the new start-up subsidy ("Gr{\"u}ndungszuschuss") in Germany and consists of four empirical analyses that extend the existing evidence on start-up incentives for unemployed individuals from multiple perspectives and in the following directions: First, it provides the first impact evaluation of the new start-up subsidy in Germany. The results indicate that participation in the new start-up subsidy has significant positive and persistent effects on both reintegration into the labor market as well as the income profiles of participants, in line with previous evidence on comparable German and international programs, which emphasizes the general potential of start-up incentives as part of the broader ALMP toolset. Furthermore, a new innovative sensitivity analysis of the applied propensity score matching approach integrates findings from entrepreneurship and labor market research about the key role of an individual's personality on start-up decision, business performance, as well as general labor market outcomes, into the impact evaluation of start-up incentives. The sensitivity analysis with regard to the inclusion and exclusion of usually unobserved personality variables reveals that differences in the estimated treatment effects are small in magnitude and mostly insignificant. Consequently, concerns about potential overestimation of treatment effects in previous evaluation studies of similar start-up incentives due to usually unobservable personality variables are less justified, as long as the set of observed control variables is sufficiently informative (Chapter 2). Second, the thesis expands our knowledge about the longer-term business performance and potential of subsidized businesses arising from the start-up subsidy program. In absolute terms, the analysis shows that a relatively high share of subsidized founders successfully survives in the market with their original businesses in the medium to long run. The subsidy also yields a "double dividend" to a certain extent in terms of additional job creation. Compared to "regular", i.e., non-subsidized new businesses founded by non-unemployed individuals in the same quarter, however, the economic and growth-related impulses set by participants of the subsidy program are only limited with regard to employment growth, innovation activity, or investment. Further investigations of possible reasons for these differences show that differential business growth paths of subsidized founders in the longer run seem to be mainly limited by higher restrictions to access capital and by unobserved factors, such as less growth-oriented business strategies and intentions, as well as lower (subjective) entrepreneurial persistence. Taken together, the program has only limited potential as a business and entrepreneurship policy intended to induce innovation and economic growth (Chapters 3 and 4). And third, an empirical analysis on the level of German regional labor markets yields that there is a high regional variation in subsidized start-up activity relative to overall new business formation. The positive correlation between regular start-up intensity and the share among all unemployed individuals who participate in the start-up subsidy program suggests that (nascent) unemployed founders also profit from the beneficial effects of regional entrepreneurship capital. Moreover, the analysis of potential deadweight and displacement effects from an aggregated regional perspective emphasizes that the start-up subsidy for unemployed individuals represents a market intervention into existing markets, which affects incumbents and potentially produces inefficiencies and market distortions. This macro perspective deserves more attention and research in the future (Chapter 5).},
  language  = {en}
}
@phdthesis{Mahlstedt2017,
  author    = {Mahlstedt, Robert},
  title     = {Essays on job search behavior and labor market policies},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-397081},
  school      = {Universit{\"a}t Potsdam},
  pages     = {252},
  year      = {2017},
  abstract  = {Persistently high unemployment rates are a major threat to the social cohesion in many societies. To moderate the consequences of unemployment industrialized countries spend substantial shares of their GDP on labor market policies, while in recent years there has been a shift from passive measures, such as transfer payments, towards more activating elements which aim to promote the reintegration into the labor market. Although, there exists a wide range of evidence about the effects of traditional active labor market policies (ALMP) on participants' subsequent labor market outcomes, a deeper understanding of the impact of these programs on the job search behavior and the interplay with long-term labor market outcomes is necessary. This allows policy makers to improve the design of labor market policies and the allocation of unemployed workers into specific programs. Moreover, previous studies have shown that many traditional ALMP programs, like public employment or training schemes, do not achieve the desired results. This underlines the importance of understanding the effect mechanisms, but also the need to develop innovative programs that are more effective. This thesis extends the existing literature with respect to several dimensions. First, it analyzes the impact of job seekers' beliefs about upcoming ALMPs programs on the effectiveness of realized treatments later during the unemployment spell. This provides important insights with respect to the job search process and relates potential anticipation effects (on the job seekers behavior before entering a program) to the vast literature evaluating the impact of participating in an ALMP program on subsequent outcomes. The empirical results show that training programs are more effective if the participants expect participation ex ante, while expected treatment effects are unrelated to the actual labor market outcomes of participants. A subsequent analysis of the effect mechanisms shows that job seekers who expect to participate also receive more information by their caseworker and show a higher willingness to adjust their search behavior in association with an upcoming ALMP program. The findings suggest that the effectiveness of training programs can be improved by providing more detailed information about the possibility of a future treatment early during the unemployment spell. Second, the thesis investigates the effects of a relatively new class of programs that aim to improve the geographical mobility of unemployed workers with respect to the job search behavior, the subsequent job finding prospects and the returns to labor market mobility. To estimate the causal impact of these programs, it is exploited that local employment agencies have a degree of autonomy when deciding about the regional-specific policy mix. The findings show that the policy style of the employment agency indeed affects the job search behavior of unemployed workers. Job seekers who are assigned to agencies with higher preferences for mobility programs increase their search radius without affecting the total number of job applications. This shift of the search effort to distant regions leads to a higher probability to find a regular job and higher wages. Moreover, it is shown that participants in one of the subsidy programs who move to geographically distant region a earn significantly higher wages, end up in more stable jobs and face a higher long-run employment probability compared to non-participants. Third, the thesis offers an empirical assessment of the unconfoundedness assumption with respect to the relevance of variables that are usually unobserved in studies evaluating ALMP programs. A unique dataset that combines administrative records and survey data allows us to observe detailed information on typical covariates, as well as usually unobserved variables including personality traits, attitudes, expectations, intergenerational information, as well as indicators about social networks and labor market flexibility. The findings show that, although our set of usually unobserved variables indeed has a significant effect on the selection into ALMP programs, the overall impact when estimating treatment effects is rather small. Finally, the thesis also examines the importance of gender differences in reservation wages that allows assessing the importance of special ALMP programs targeting women. In particular, when including reservation wages in a wage decomposition exercise, the gender gap in realized wages becomes small and statistically insignificant. The strong connection between gender differences in reservation wages and realized wages raises the question how these differences in reservation wages are set in the first place. Since traditional covariates cannot sufficiently explain the gender gap in reservation wages, we perform subgroup analysis to better understand what the driving forces behind this gender gap are.},
  language  = {en}
}
@techreport{CaliendoTuebbicke2019,
  type      = {Working Paper},
  author    = {Caliendo, Marco and T{\"u}bbicke, Stefan},
  title     = {New Evidence on Long-Term Effects of Start-Up Subsidies},
  series = {CEPA Discussion Papers},
  journal   = {CEPA Discussion Papers},
  number    = {6},
  issn      = {2628-653X},
  doi       = {10.25932/publishup-42679},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-426798},
  pages     = {41},
  year      = {2019},
  abstract  = {The German start-up subsidy (SUS) program for the unemployed has recently undergone a major make-over, 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}
}
@techreport{CaliendoTuebbicke2019,
  type      = {Working Paper},
  author    = {Caliendo, Marco and T{\"u}bbicke, Stefan},
  title     = {Do Start-Up Subsidies for the Unemployed Affect Participants' Well-Being?},
  series = {CEPA Discussion Papers},
  journal   = {CEPA Discussion Papers},
  number    = {14},
  issn      = {2628-653X},
  doi       = {10.25932/publishup-43746},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-437468},
  pages     = {47},
  year      = {2019},
  abstract  = {We estimate the long-term effects of start-up subsidies (SUS) for the unemployed on subjective outcome indicators of well-being, as measured by the participants' satisfaction in different domains. This extends previous analyses of the current German SUS program ("Gr{\"u}ndungszuschuss") that focused on objective outcomes - such as employment and income - and allows us to make a more complete judgment about the overall effects of SUS at the individual level. This is especially important because subsidizing the transition into self-employment may have unintended adverse effects on participants' well-being due to its risky nature and lower social security protection, especially in the long run. Having access to linked administrative-survey data providing us with rich information on pre-treatment characteristics, we base our analysis on the conditional independence assumption and use propensity score matching to estimate causal effects within the potential outcomes framework. We find long-term positive effects on job satisfaction but negative effects on individuals' satisfaction with their social security situation. Further findings suggest that the negative effect on satisfaction with social security may be driven by negative effects on unemployment and retirement insurance coverage. Our heterogeneity analysis reveals substantial variation in effects across gender, age groups and skill levels. The sensitivity analyses show that these findings are highly robust.},
  language  = {en}
}
@techreport{CaliendoTuebbicke2021,
  type      = {Working Paper},
  author    = {Caliendo, Marco and T{\"u}bbicke, Stefan},
  title     = {Design and Effectiveness of Start-Up Subsidies},
  series = {CEPA Discussion Papers},
  journal   = {CEPA Discussion Papers},
  number    = {30},
  issn      = {2628-653X},
  doi       = {10.25932/publishup-50005},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-500056},
  pages     = {20},
  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 case-workers' 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 in-creased the program's impacts while reducing the cost per participant.},
  language  = {en}
}
@techreport{CaliendoMahlstedtvandenBergetal.2020,
  type      = {Working Paper},
  author    = {Caliendo, Marco and Mahlstedt, Robert and van den Berg, Gerard J. and Vikstr{\"o}m, Johan},
  title     = {Side Effects of Labor Market Policies},
  series = {CEPA Discussion Papers},
  journal   = {CEPA Discussion Papers},
  number    = {22},
  issn      = {2628-653X},
  doi       = {10.25932/publishup-47883},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-478839},
  pages     = {33},
  year      = {2020},
  abstract  = {Labor market policy tools such as training and sanctions are commonly used to help bring workers back to work. By analogy to medical treatments, the individual exposure to these tools may have side effects. We study effects on health using individual-level population registers on labor market events outcomes, drug prescriptions and sickness absence, comparing outcomes before and after exposure to training and sanctions. We find that training improves cardiovascular and mental health and lowers sickness absence. The results suggest that this is not due to improved employment prospects but rather to instantaneous features of participation such as, perhaps, the adoption of a more rigorous daily routine. Unemployment benefits sanctions cause a short-run deterioration of mental health, possibly due higher stress levels, but this tapers out quickly.},
  language  = {en}
}
@techreport{CaliendoKuennWeissenberger2019,
  type      = {Working Paper},
  author    = {Caliendo, Marco and K{\"u}nn, Steffen and Weißenberger, Martin},
  title     = {Catching up or Lagging Behind?},
  series = {CEPA Discussion Papers},
  journal   = {CEPA Discussion Papers},
  number    = {12},
  issn      = {2628-653X},
  doi       = {10.25932/publishup-43701},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-437012},
  year      = {2019},
  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 nonunemployment 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}
}
@techreport{CaliendoKuennMahlstedt2022,
  type      = {Working Paper},
  author    = {Caliendo, Marco and K{\"u}nn, Steffen and Mahlstedt, Robert},
  title     = {The Intended and Unintended Effects of Promoting Labor Market Mobility},
  series = {CEPA Discussion Papers},
  journal   = {CEPA Discussion Papers},
  issn      = {2628-653X},
  doi       = {10.25932/publishup-53522},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-535229},
  pages     = {49},
  year      = {2022},
  abstract  = {Subsidizing the geographical mobility of unemployed workers may improve welfare by relaxing their financial constraints and allowing them to find jobs in more prosperous regions. We exploit regional variation in the promotion of mobility programs along administrative borders of German employment agency districts to investigate the causal effect of offering such financial incentives on the job search behavior and labor market integration of unemployed workers. We show that promoting mobility - as intended - causes job seekers to increase their search radius, apply for and accept distant jobs. At the same time, local job search is reduced with adverse consequences for reemployment and earnings. These unintended negative effects are provoked by spatial search frictions. Overall, the unconditional provision of mobility programs harms the welfare of unemployed job seekers.},
  language  = {en}
}
@techreport{BlockKritikosPriemetal.2022,
  type      = {Working Paper},
  author    = {Block, J{\"o}rn and Kritikos, Alexander and Priem, Maximilian and Stiel, Caroline},
  title     = {Emergency-Aid for Self-employed in the Covid-19 Pandemic},
  series = {CEPA Discussion Papers},
  journal   = {CEPA Discussion Papers},
  number    = {55},
  address   = {Potsdam},
  issn      = {2628-653X},
  doi       = {10.25932/publishup-56268},
  url       = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-562688},
  pages     = {41},
  year      = {2022},
  abstract  = {The self-employed faced strong income losses during the Covid-19 pandemic. Many governments introduced programs to financially support the self-employed during the pandemic, including Germany. The German Ministry for Economic Affairs announced a €50bn emergency-aid program in March 2020, offering one-off lump-sum payments of up to €15,000 to those facing substantial revenue declines. By reassuring the self- employed that the government 'would not let them down' during the crisis, the program had also the important aim of motivating the self-employed to get through the crisis. We investigate whether the program affected the confidence of the self-employed to survive the crisis using real-time online-survey data comprising more than 20,000 observations. We employ propensity score matching, making use of a rich set of variables that influence the subjective survival probability as main outcome measure. We observe that this program had significant effects, with the subjective survival probability of the self- employed being moderately increased. We reveal important effect heterogeneities with respect to education, industries, and speed of payment. Notably, positive effects only occur among those self-employed whose application was processed quickly. This suggests stress-induced waiting costs due to the uncertainty associated with the administrative processing and the overall pandemic situation. Our findings have policy implications for the design of support programs, while also contributing to the literature on the instruments and effects of entrepreneurship policy interventions in crisis situations.},
  language  = {en}
}