The evaluation of start-up support for the unemployed is a thread running through our work, beginning with the evaluation of the Hartz reforms and its continuation on the long-term effects of the bridging allowance and the start-up subsidy. In 2006, the Gründungszuschuss (Section 57 SGB III) replaced these two instruments. Together with the Institute for Employment Research, which commissioned the project, we examined whether the new instrument could build on their record. A dedicated dataset was created for this purpose: administrative data from the Federal Employment Agency, supplemented by telephone surveys of around 2,300 recipients from the first quarter of 2009 and of two control groups, namely eligible unemployed persons and, for the first time, unsubsidised business founders. Nineteen months after start-up, 75 to 84 per cent of recipients were still self-employed and up to 94 per cent were integrated in the labour market, more than under either predecessor. The comparison with unsubsidised start-ups produced a nuanced picture: subsidised businesses survived more often but lagged behind in income, growth and innovation. As an instrument of labour market policy, then, the subsidy works. As start-up support in the narrower sense, it works less well. The much-debated deadweight losses could also be measured in both dimensions for the first time, that is, not only whether the business would have been founded without the subsidy, but also whether the subsidy affected its success. They exist but are considerably smaller than previously assumed. At the end of 2011 the Gründungszuschuss was fundamentally reformed and moved to Sections 93 f. SGB III: the legal entitlement became a discretionary benefit, the required remaining claim to unemployment benefit rose from 90 to 150 days, and take-up collapsed. A third project phase used this break to compare the award practice, the composition of recipients and the effects of the instrument before and after the reform.
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