LAUSR

In the spring of 2020, the skilled crafts sector was simultaneously affected by two different policy measures: the COVID-19-induced lockdown measures and a new market entry regulation. We use administrative data from the German Chambers of Skilled Crafts to analyse the effects of both of these policy changes on firms' registration rates. The results provide no evidence of possible structural damage in business formation as a consequence of corona measures. Instead, we find a reduction in entrepreneurial activity due to the new regulation policy consistent with prior expectations.