How Does Entry Regulation Infl uence Entry intoSelf-Employment and Occupational Mobility?

We analyze how an entry regulation that imposes a mandatory educational standard affectsentry into self-employment and occupational mobility. We exploit the German reunification asa natural experiment and identify regulatory effects by comparing differences betweenregulated occupations and unregulated occupations in East Germany to the correspondingdifferences in West Germany after reunification. Consistent with our expectations, we findthat entry regulation reduces entry into self-employment and occupational mobility afterreunification more in regulated occupations in East Germany than in West Germany. Ourfindings are relevant for transition or emerging economies as well as for mature marketeconomies requiring large structural changes after unforeseen economic shocks....