Authors	Caliendo, M. and Kritikos, A.S.
Year	2009
Reference	Perspektiven der Wirtschaftspolitik, 10(2), 189-213.
Keywords	Start-Up Subsidies, Active Labour Market Policies, Unemployment.
JEL-Classification	J68, M13.
Download	IZA Discussion Paper No. 3114 from October 2007: PDF
Abstract	Support schemes for unemployed aiming for self-employment have been recently reformed several times in Germany. In 2003, the start-up-subsidy was added to the existing bridging-allowance. In 2006 both instruments were merged to the Gründungszuschuss. Since the bridging allowance has been evaluated as effective and efficient and the start-up-subsidy reached new target groups, the latest reform shows several shortcomings. The design of the Gründungszuschuss is suboptimal, leading to efficiency losses if its participants act rational. It will also be less effective when compared to the two old programs. Overall, the recent dynamic development of new businesses will slow down more than necessary.