Start-up incentives targeted at unemployed individuals have become an important tool of the Active Labor Market Policy (ALMP) to fight unemployment in many countries in recent years. In contrast to traditional ALMP instruments like training measures, wage subsidies, or job creation schemes,...

In industrialized economies such as the European countries unemployment rates are very responsive to the business cycle and significant shares stay unemployed for more than one year. To fight cyclical and long-term unemployment countries spend significant shares of their budget on Active Labor...