Economic effects of the amendment to the HwO in 2004: Results from a quasinatural experiment

The amendment to the regulation of the craft sector in Germany in 2004 led to lower market entry barriers for a part of the craft sector. This article analyzes the influence of the reform on the number of businesses in the craft sector and the training intensity, using data from the Central Association of the German craftsmanship (ZDH). The effects of the reform are estimated by the difference-in-differences technique, which is based on the fact that only a part of the craft sector is affected by the reform. The results show a sharp increase in the number of businesses as a result of the reform. However, no statistically significant effects are found with regard to the training intensity. Extensive robustness analyzes confirm these results.

Koch, A; Nielen, S. (2016): Ökonomische Wirkungen der Handwerksnovelle 2004: Ergebnisse aus einem quasinatürlichen Experiment, in: IfM Bonn: Working Paper 07/16, Bonn.

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