Microeconomic Issues on Firm Start-Ups
The following discussion on firm start-ups from unemployment and employment, respectively, is focused on the occupational choice of self-employment, i.e. to start a business, whereas in Chapter 5 the focus was on the decision of the unemployed to enter self- or paid-employment.91 Thus, an individual’s decision to form a company depends on the attractiveness of available alternatives, given prevailing governmental conditions.92 Attractiveness will depend on initial financial endowment, human capital, risk aversion, the wish for independence, social and family networks and other factors determining preferences as well as costs and benefits which are also closely related to the size of the company which self-employed persons establish in Germany (see Pfeiffer, 1994).
KeywordsRisk Preference Occupational Choice Unemployed People Unemployed Person Capital Endowment
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- 93.See Brüderl et al. (1996, 33-66) and the references there for a detailed discussion on these approaches.Google Scholar