How does entry regulation influence entry into self-employment and occupational mobility?

Authors: Prantl, Susanne¹; Spitz-Oener, Alexandra²

Source: Economics of Transition, Volume 17, Number 4, October 2009 , pp. 769-802(34)

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Abstract:

We analyse how an entry regulation that imposes a mandatory educational standard affects entry into self-employment and occupational mobility. We exploit German reunification as a natural experiment and identify regulatory effects by comparing differences between regulated and unregulated occupations in East Germany with the corresponding differences in West Germany after reunification. Consistent with our expectations, we find that entry regulation reduces entry into self-employment and occupational mobility after reunification more in regulated occupations in East Germany than in West Germany. Our findings are relevant for transition or emerging economies as well as for mature market economies requiring large structural changes after unforeseen economic shocks.

Keywords: J24; J62; K20; L11; L51; M13; Entry regulation; self-employment; occupational mobility

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1468-0351.2009.00374.x

Affiliations: 1: Max Planck Institute for Research on Collective goods and IFS., Email: susanne.prantl@googlemail.com 2: Humboldt-University Berlin, IAB, CASE and IZA., Email: alexandra.spitz-oener@wiwi.hu-berlin.de

Publication date: 2009-10-01