entrepreneurship, self-employment, German workers, American workers, labor economics, comparative study of countries, new firms, startups, labor demand
In this paper we analyze microdata to explore differences in the rates at which American and German workers leave their salaried jobs to become self-employed. We document that the rate of self-employment is lower in Germany than in the U.S., and the rate of transition from wage-earning to self-employment is lower as well. We find evidence that German workers face liquidity constraints that are more severe than those of their American counterparts. Further, the difference in transition rates cannot be attributed to observable differences between German and American workers.
Holtz-Eakin, Douglas and Rosen, Harvey, "Cash Constraints and Business Start-ups: Deutschmarks versus Dollars" (1999). Center for Policy Research. 148.
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