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Do Start-Up Subsidies for the Unemployed Affect Participants’ Well-Being?

  • 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 negativeWe 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.show moreshow less

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Metadaten
Author:Marco CaliendoGND, Stefan TübbickeGND
URN:urn:nbn:de:kobv:517-opus4-437468
DOI:https://doi.org/10.25932/publishup-43746
ISSN:2628-653X
Parent Title (English):CEPA Discussion Papers
Subtitle (English):A Rigorous Look at (Un-)Intended Consequences of Labor Market Policies
Series (Serial Number):CEPA Discussion Papers (14)
Document Type:Working Paper
Language:English
Date of first Publication:2019/11/14
Year of Completion:2019
Publishing Institution:Universität Potsdam
Release Date:2019/11/14
Tag:Counterfactual Analysis; Propensity Score Matching; Start-Up Subsidies; Well-Being
Issue:14
Pagenumber:47
RVK - Regensburg Classification:QP 230, QP 380, QP 710, QC 010
Organizational units:Zentrale und wissenschaftliche Einrichtungen / Center for Economic Policy Analysis (CEPA)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
JEL Classification:C Mathematical and Quantitative Methods / C1 Econometric and Statistical Methods: General / C14 Semiparametric and Nonparametric Methods
H Public Economics / H4 Publicly Provided Goods / H43 Project Evaluation; Social Discount Rate
I Health, Education, and Welfare / I3 Welfare and Poverty / I31 General Welfare
J Labor and Demographic Economics / J6 Mobility, Unemployment, and Vacancies / J68 Public Policy
L Industrial Organization / L2 Firm Objectives, Organization, and Behavior / L26 Entrepreneurship
Peer Review:Nicht referiert
Licence (German):License LogoKeine Nutzungslizenz vergeben - es gilt das deutsche Urheberrecht