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

How does entry regulation influence entry into self-employment and occupational mobility?
Document type
Working Paper
Author(s)
Prantl, Susanne; Spitz-Oener, Alexandra
Publisher
Institute for Fiscal Studies
Date of publication
1 July 2009
Series
The Institute for Fiscal Studies Working Papers
Subject(s)
People management: all aspects of managing people
Collection
Business and management
Material type
Reports

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

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