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Lena Jacobi and Jochen Kluve
dicate that the survival rate and employment effects of subsidised start-ups do
not differ from unsubsidised start-ups. The Hartz evaluation study by IAB/
DIW/Sinus/GfA/infas (2005) also provides results on the effectiveness of the
bridging allowance before the reform. The analysis is based on administrative
data of cohorts entering unemployment in 2000 which are observed until 2002.
The effectiveness of start-up subsidies is assessed using matching methods.
The authors suspect, however, that some selection bias might remain due to
unobservable characteristics of unemployed who decide to start-up a business.
The results show that 6 months after the bridging allowance expires the effect
is still significantly positive on a high level, especially for women. For the
period after the reform, the data is complemented with survey data for the
treatment and control group. The study confirms the positive results of
bridging allowance after the reform.
For the second, new type of start-up subsidy, the so-called “Ich-AG” or “Me,
Inc.” subsidy, most participants are still receiving the subsidy at the end of the
observation period. Information on effects after eligibility expires is therefore
not available yet. However, the subsidy, which gradually diminishes, is gen-
erally very low at the end of the observation period. Therefore, the signifi-
cantly positive effects that can be observed at that stage might be expected to
persist further as well. At the same time the study reports indications of
windfall gains as a substantial number of start-up subsidy recipients report
that they would have started a business also without the subsidy. These figures
amount to around 25-60% for bridging allowance recipients, and to 60-70%
of individuals in the “Me, Inc.” scheme. Even for these businesses, however,
the subsidy might still have exerted a positive effect during the first months in
business, rather than on business creation per se.
Wage Protection for Older Workers
Wage protection is a wage subsidy for workers aged 50 and older who take up
employment in a job that pays less than the previous job. The effect of the
subsidy on the employment prospects of older workers is studied by ZEW/
IAB/IAT (2005). The analysis employs a difference-in-differences estimator
using administrative data from the years 2002 and 2003, where workers aged
50 or 51 are the treatment group and workers aged 48 or 49 are the control
group. The results indicate a positive though insignificant effect of the subsidy.
The authors suggest that the insignificance might be due to low take-up of
wage protection.
Employment with Reduced Social Security Contributions (Mini-/Midijob)
Various reform elements, including the introduction of Mini-/Midijobs, are
evaluated in terms of their impact on the general structure of employment.
These studies are part of the report by RWI Essen et al. (2005). The intro-