Microeconomic Issues on Firm Start-Ups

Abstract

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 PreferenceOccupational ChoiceUnemployed PeopleUnemployed PersonCapital EndowmentThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.