Cash Constraints and Business Start-Ups: Deutschmarks Versus Dollars

Syracuse University Center for Policy Research Working Paper No. 11

34 Pages Posted: 13 Apr 2011

See all articles by Douglas Holtz-Eakin

Douglas Holtz-Eakin

Independent

Harvey S. Rosen

Princeton University - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: June 1, 1999

Abstract

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.

JEL Classification: G24, J23, M13, O57

Suggested Citation

Holtz-Eakin, Douglas and Rosen, Harvey S., Cash Constraints and Business Start-Ups: Deutschmarks Versus Dollars (June 1, 1999). Syracuse University Center for Policy Research Working Paper No. 11, Available at SSRN: https://ssrn.com/abstract=1807995 or http://dx.doi.org/10.2139/ssrn.1807995

Harvey S. Rosen

Princeton University - Department of Economics ( email )

001 Fisher Hall
Princeton, NJ 08544
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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