Success factors of small businesses set up by previously unemployed individuals : a multivariate examination of previously unemployed people who set up their own businesses and were supported by the Employment Office with the Bridging Allowance (§ 57 Social Code III)

Abstract

"For almost one and a half decades now unemployed people who wish to become self-employed have been supported by the Employment Office by means of the bridging allowance (§57 Social Code III, previously §55a Employment Promotion Act). What was initially viewed sceptically and discussed quite controversially is today an important instrument of active labour market policy. What started out as 5,576 people granted the allowance in 1986 had grown to 98,114 people in 1999. The funding volume of the support programme also grew accordingly. At the same time the support from the Employment Office has gained considerable significance for the self-employment scene in Germany. For instance in the last two years almost one in five new business start-ups in Germany was realised with the aid of the Employment Office. Last year alone the Federal Employment Services spent some DM 1.5 billion on supporting unemployed people who were prepared to become self-employed. This is reason enough to subject the effect and success of the bridging allowance to a critical appreciation. Impact research is absolutely essential for an effective and efficient allocation of resources from insurance funds, for the further development of the support instrument and finally also for deriving recommendations of action for the policy-makers. The primary aim of the IAB study was thus not only to obtain structural information about those receiving the bridging allowance but also to examine various success indicators both at individual level and at the macro-level of the labour market. In addition to this a further focus of the project was the causal-analytical examination of possible success factors. Key determinants here proved to be in particular start-up capital and business-specific human capital. The support of new businesses should start here, but without causing distortions of competition as a result of spontaneous interventions in the market structure." (Author's abstract, IAB-Doku) ((en))

Cite article

Wießner, F. (2000): Erfolgsfaktoren von Existenzgründungen aus der Arbeitsmarktpolitik. Eine multivariate Betrachtung vormals arbeitsloser Existenzgründer, die vom Arbeitsamt mit dem Überbrückungsgeld (§ 57 SGB III) gefördert werden. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 33, No. 3, p. 518-532.