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Start-up support for unemployed people
Country of implementation
General short description of the innovation
Start-up support for unemployed workers was strongly increased in the course of the Hartz reforms but / later reduced, despite positive evaluations. Start-up support in the context of active labour market policies always has the form of income support (extending benefits for certain periods even though the new entrepreneur is no longer unemployed and available for the labour market). Other forms of support are generally available and not specific to start-ups out of unemployment.
Type of Policy
Duration of the policy
Start-up support in the context of active labour market policy was first introduced in 1986. By introducing conditional entitlements to start-up support, legislation in the context of the Hartz reforms boosted the number of recipients of such support. In 2011, entitlements were removed, and start-up support became a discretionary measure again, depending on available budgets. Numbers of recipients dropped drastically.
Scope of innovation
- Budgets: Spending for start-up support peaked i n 2010 with 1.9 billion Euros and dropped to 260,000 Euros in 2013
- Number of intended beneficiaries: The number of beneficiaries peaked in 2010 with 170,000 and fell to 37,000 in 2012
- Spatial coverage: national
General description of (intended) objectives and strategies
The objective of expanding start-up support for unemployed jobseekers was to create additional employment and to overcome barriers against labour market entry certain groups face because of age or because of being foreign-born. An additional objective was to curb moonlighting by legalizing existing activities as official self-employment. The objective of removing the entitlement to start-up support and of making it a discretionary measure was simply cutting down expenditure.
Nature of the innovation-short-term perspective
Retrenchment of start-up support within the existing institutional framework
Type of ideal-typical strategy for the innovation
- typical strategy for the innovation (optional; according to Obinger)-others (retrenchment)
Type of innovation
- retrenchment or expansion of an existing/earlier policy
- others (start-up support, creation of self-employment)
Intended target group
Working age population
- employment situation (please specify: e.g. typical work/atypical/unemployed) (unemployed)
- main source of income: social protection (please specify; e.g. unemployment benefits/disability benefits/social assistance/other benefits) (unemployment benefits)
Actors involved in policy-making/implementation and/or evaluation
- making/implementation and/or evaluation-agency or national social insurance body
- others (new self-employed jobs)
Did the innovation have any outcome related to job quantity?
Increase in the number of freelancers (self-employed without employees)
Intended and unintended outcomes
The size of the target group was never assessed
Clarification of outcomes in terms of impacting resilience and labour market inclusion
Evaluations demonstrated satisfactory survival rates of the new start-ups, whereas the job creation effect was small and mostly restricted to the founders themselves who would not employ others. With the experience gathered from self-employed work, some founders of their own businesses later became employees again. With regard to labour market resilience and inclusion, this can be seen as an equally positive outcome. To sum up, expansion of start-up support was positive, its retrenchment was negative.