The impact of regulation in the German crafts sector, a first look.

The licensing requirement for startups in the crafts sector was suspended in some trades in 2004, but for some of them, it was reintroduced in 2020. Petrik Runst (Thünen Institute) and Jörg Thomä (ifh Göttingen) have empirically examined this topic and published preliminary results in the economic policy journal "Wirtschaftsdienst." The analysis suggests a reversal of the deregulation effects of 2004 due to the re-regulation. After 2020, a significant decline in new startups and an increase in successfully passed master exams can be observed in newly licensed trades. So far, there are only weak indications of a positive impact on the number of crafts trainees. Future in-depth studies with a longer observation period will determine the robustness of these results.

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