TY - RPRT A1 - Caliendo, Marco A1 - Tübbicke, Stefan T1 - Do Start-Up Subsidies for the Unemployed Affect Participants’ Well-Being? BT - A Rigorous Look at (Un-)Intended Consequences of Labor Market Policies T2 - CEPA Discussion Papers N2 - 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 (“Gründungszuschuss”) 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. T3 - CEPA Discussion Papers - 14 KW - Start-Up Subsidies KW - Propensity Score Matching KW - Counterfactual Analysis KW - Well-Being Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-437468 SN - 2628-653X IS - 14 ER - TY - RPRT A1 - Caliendo, Marco A1 - Fossen, Frank M. A1 - Kritikos, Alexander T1 - What Makes an Employer? T2 - CEPA Discussion Papers N2 - As the policy debate on entrepreneurship increasingly centers on firm growth in terms of job creation, it is important to better understand which variables influence the first hiring decision and which ones influence the subsequent survival as an employer. Using the German Socio-economic Panel (SOEP), we analyze what role individual characteristics of entrepreneurs play in sustainable job creation. While human and social capital variables positively influence the hiring decision and the survival as an employer in the same direction, we show that none of the personality traits affect the two outcomes in the same way. Some traits are only relevant for survival as an employer but do not influence the hiring decision, other traits even unfold a revolving door effect, in the sense that employers tend to fail due to the same characteristics that positively influenced their hiring decision. T3 - CEPA Discussion Papers - 13 KW - employer KW - entrepreneurship KW - business venturing KW - firm growth KW - employment growth KW - personality Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-437360 SN - 2628-653X IS - 13 ER - TY - RPRT A1 - Caliendo, Marco A1 - Künn, Steffen A1 - Weißenberger, Martin T1 - Catching up or Lagging Behind? BT - The Long-Term Business and Innovation Potential of Subsidized Start-Ups out of Unemployment T2 - CEPA Discussion Papers N2 - 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. T3 - CEPA Discussion Papers - 12 KW - Entrepreneurship KW - Start-up Subsidies KW - Business Grow KW - Innovation KW - Job Creation Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-437012 SN - 2628-653X IS - 12 ER - TY - RPRT A1 - Caliendo, Marco A1 - Goethner, Maximilian A1 - Weißenberger, Martin T1 - Entrepreneurial Persistence Beyond Survival: Measurement and Determinants T2 - CEPA Discussion Papers N2 - Entrepreneurial persistence is demonstrated by an entrepreneur’s continued positive maintenance of entrepreneurial motivation and constantly-renewed active engagement in a new business venture despite counter forces or enticing alternatives. It is thus a crucial factor for entrepreneurs when pursuing and exploiting their business opportunities and to realize potential economic gains and benefits. Using rich data on a representative sample of German business founders, we investigate the determinants of entrepreneurial persistence. Next to observed survival we also construct a hybrid persistence measure capturing also the motivational dimension of persistence. We analyze the influence of individual-level (human capital and personality) and business-related characteristics on both measures as well as their relative importance. We find that the two indicators emphasize different aspects of persistence. For the survival indicator, the predictive power is concentrated in business characteristics and human capital, while for hybrid persistence, the dominant factors are business characteristics and personality. Finally, we show that results are heterogeneous across subgroups. In particular, formerly-unemployed founders do not differ in survival chances, but they are more likely to lack a high psychological commitment to their business ventures. T3 - CEPA Discussion Papers - 11 KW - Entrepreneurship KW - Start-ups KW - Persistence KW - Survival Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-434563 SN - 2628-653X IS - 11 ER - TY - RPRT A1 - Bruttel, Lisa Verena A1 - Felgendreher, Simon A1 - Güth, Werner A1 - Hertwig, Ralph T1 - Strategic ignorance in repeated prisoners’ dilemma experiments and its effects on the dynamics of voluntary cooperation T2 - CEPA Discussion Papers N2 - Being ignorant of key aspects of a strategic interaction can represent an advantage rather than a handicap. We study one particular context in which ignorance can be beneficial: iterated strategic interactions in which voluntary cooperation may be sustained into the final round if players voluntarily forego knowledge about the time horizon. We experimentally examine this option to remain ignorant about the time horizon in a finitely repeated two-person prisoners’ dilemma game. We confirm that pairs without horizon knowledge avoid the drop in cooperation that otherwise occurs toward the end of the game. However, this effect is superposed by cooperation declining more rapidly in pairs without horizon knowledge during the middle phase of the game, especially if players do not know that the other player also wanted to remain ignorant of the time horizon. T3 - CEPA Discussion Papers - 10 KW - strategic ignorance KW - cooperation KW - prisoners' dilemma KW - experiment Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-431881 SN - 2628-653X IS - 10 ER - TY - RPRT A1 - Müller, Kai-Uwe A1 - Wrohlich, Katharina T1 - Does subsidized care for toddlers increase maternal labor supply? BT - Evidence from a large-scale expansion of early childcare T2 - CEPA Discussion Papers N2 - Expanding public or publicly subsidized childcare has been a top social policy priority in many industrialized countries. It is supposed to increase fertility, promote children’s development and enhance mothers’ labor market attachment. In this paper, we analyze the causal effect of one of the largest expansions of subsidized childcare for children up to three years among industrialized countries on the employment of mothers in Germany. Identification is based on spatial and temporal variation in the expansion of publicly subsidized childcare triggered by two comprehensive childcare policy reforms. The empirical analysis is based on the German Microcensus that is matched to county level data on childcare availability. Based on our preferred specification which includes time and county fixed effects we find that an increase in childcare slots by one percentage point increases mothers’ labor market participation rate by 0.2 percentage points. The overall increase in employment is explained by the rise in part-time employment with relatively long hours (20-35 hours per week). We do not find a change in full-time employment or lower part-time employment that is causally related to the childcare expansion. The effect is almost entirely driven by mothers with medium-level qualifications. Mothers with low education levels do not profit from this reform calling for a stronger policy focus on particularly disadvantaged groups in coming years. T3 - CEPA Discussion Papers - 9 KW - childcare provision KW - mother’s labor supply KW - generalized difference-in-difference Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-427727 SN - 2628-653X IS - 9 ER - TY - RPRT A1 - Borck, Rainald A1 - Schrauth, Philipp T1 - Population density and urban air quality T2 - CEPA Discussion Papers N2 - We use panel data from Germany to analyze the effect of population density on urban air pollution (nitrogen oxides, particulate matter and ozone). To address unobserved heterogeneity and omitted variables, we present long difference/fixed effects estimates and instrumental variables estimates, using historical population and soil quality as instruments. Our preferred estimates imply that a one-standard deviation increase in population density increases air pollution by 3-12%. T3 - CEPA Discussion Papers - 8 KW - population density KW - air pollution Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-427719 SN - 2628-653X IS - 8 ER - TY - RPRT A1 - Bruttel, Lisa Verena A1 - Nithammer, Juri A1 - Stolley, Florian T1 - ”Thanks in Advance” BT - The Negative Effect of a Polite Phrase on Compliance with a Request T2 - CEPA Discussion Papers N2 - This paper studies the effect of the commonly used phrase “thanks in advance” on compliance with a small request. In a controlled laboratory experiment we ask participants to give a detailed answer to an open question. The treatment variable is whether or not they see the phrase “thanks in advance.” Our participants react to the treatment by exerting less effort in answering the request even though they perceive the phrase as polite. T3 - CEPA Discussion Papers - 7 KW - compliance behavior KW - gratitude KW - reciprocity KW - experiment Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-427706 SN - 2628-653X IS - 7 ER - TY - RPRT A1 - Caliendo, Marco A1 - Tübbicke, Stefan T1 - New Evidence on Long-Term Effects of Start-Up Subsidies BT - Matching Estimates and their Robustness T2 - CEPA Discussion Papers N2 - 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”. T3 - CEPA Discussion Papers - 6 KW - Start-Up Subsidies KW - Policy Reform KW - Matching KW - Instrumental Variables Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-426798 SN - 2628-653X IS - 6 ER - TY - RPRT A1 - Bruttel, Lisa Verena T1 - Is There a Loyalty-Enhancing Effect of Retroactive Price-Reduction Schemes? T2 - CEPA Discussion Papers N2 - This paper presents an experiment on the effect of retroactive price-reduction schemes on buyers’ repeated purchase decisions. Such schemes promise buyers a reduced price for all units that are bought in a certain time frame if the total quantity that is purchased passes a given threshold. This study finds a loyalty-enhancing effect of retroactive price-reduction schemes only if the buyers ex-ante expected that entering into the scheme would maximize their monetary gain, but later learn that they should leave the scheme. Furthermore, the effect crucially hinges on the framing of the price reduction. T3 - CEPA Discussion Papers - 5 KW - rebate and discount KW - buyer behavior KW - risk aversion KW - loss aversion KW - regulation of dominant firms KW - experiment Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-427688 SN - 2628-653X IS - 5 ER -