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Seit 1999 die Insolvenzordnung eingeführt wurde, können sich Privatpersonen, die sich überschuldet haben, in einem Insolvenzverfahren entschulden. Dafür muss der private Schuldner zunächst die sechsjährige Wohlverhaltensphase durchlaufen, während derer sein Einkommen oberhalb einer Pfändungsgrenze an die Gläubiger abgeführt wird. Nach dieser Phase werden die Restschulden erlassen. Da in Einzelunternehmen ...
In:
Wochenbericht des DIW Berlin
78 (2011), 5, 11-13
| Frank M. Fossen
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The empirical finding that entrepreneurs invest a large share of their wealth in their own firms, despite comparably low returns and high risk, has become known as the private equity premium puzzle. This paper provides evidence supporting the hypothesis that lower risk-aversion of entrepreneurs, and thus not necessarily credit constraints, may explain this puzzle. The analysis is based on a representative ...
In:
Economica
78 (2011), 312, 656-675
| Frank M. Fossen
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Why are female entrepreneurs so rare? In Germany, women exhibit both a lower entry rate into and higher exit rate from self-employment. To explain this gender gap, this study estimates a structural microeconometric model of transition rates that includes a standard risk aversion parameter. Inputs into the model are the expected value and variance of earnings from self-employment and dependent employment, ...
In:
Applied Economics
44 (2012), 14, 1795-1812
| Frank M. Fossen
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Why do people engage in entrepreneurship and commit large parts of their personal wealth to their business, despite comparably low returns and high risk? This paper connects several streams of literature to shed some light on this puzzle and suggests possible future research avenues. Key insights from the literature are that entrepreneurs may operate in imperfect financial markets and that entrepreneurs ...
In:
Douglas Cumming ,
The Oxford Handbook of Entrepreneurial Finance
New York: Oxford University Press
109-132
| Frank M. Fossen
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A personal bankruptcy law that allows for a “fresh start” not only reduces the individual risk involved in entrepreneurship, but may also lead to higher interest rates charged by creditors. Both effects are less relevant for wealthy potential entrepreneurs. This paper illustrates these effects in a model and tests the hypotheses derived by exploiting the introduction of a “fresh start” policy in Germany ...
In:
American Law and Economics Review
16 (2014), 1, 269-312
| Frank M. Fossen
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We assess the relevance of formal education on the productivity of the self-employed, distinguishing between opportunity entrepreneurs, who voluntarily pursue a business opportunity, and necessity entrepreneurs, who lack alternative employment options. We expect differences in the returns to education between these groups due to different levels of control over the use of their human capital. The analysis ...
In:
Economics of Education Review
37 (2013), December 2013, 66-84
| Frank M. Fossen, Tobias Büttner
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Taxation changes the expectations of prospective university students about their future level and uncertainty of after-tax income. To estimate the impact of taxes on university enrollment, we estimate a structural microeconometric model, in which a high-school graduate decides to enter university studies if expected lifetime utility from this choice is greater than that anticipated from starting to ...
In:
International Tax and Public Finance
18 (2011), 6, 688-723
| Frank M. Fossen, Daniela Glocker
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Stated survey measures of risk preferences are increasingly being used in the literature, and they have been compared to revealed risk aversion primarily by means of experiments such as lottery choice tasks. In this paper, we investigate educational choice, which involves the comparison of risky future income paths and therefore depends on risk and time preferences. In contrast to experimental settings, ...
In:
European Economic Review
97 (2017), August 2017, 1-25
| Frank M. Fossen, Daniela Glocker
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We investigate the impact of a differential treatment of paid employees versus self-employed workers in a public health insurance system on the entry rate into self-employment. Health insurance systems that distinguish between the two sectors of employment create incentives or disincentives to start a business for different individuals. We estimate a discrete time hazard rate model of entry into self-employment ...
In:
Small Business Economics
49 (2017), 3, 647-669
| Frank M. Fossen, Johannes König
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Various studies interpret the positive correlation between income risk and wealth as evidence of significant precautionary savings. However, these high estimates emerge from pooling non-entrepreneurs and entrepreneurs, without controlling for heterogeneity. This article provides evidence for Germany based on representative panel data that includes private wealth balance sheets. Entrepreneurs, who face ...
In:
Oxford Bulletin of Economics and Statistics
75 (2013), 4, 528-555
| Frank M. Fossen, Davud Rostam-Afschar