Reducing Start-up Costs for New Firms: The Double Dividend on the Labor Market
Abstract: Starting a firm with expansive potential is an option for educated and high-skilled workers. This option serves as an insurance against unemployment caused by labor market frictions and hence increases the incentives for education. We showwithin a matching model that reducing the start-up...| Link(s) zu Dokument(en): | IHS Publikation |
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| Hauptverfasser: | , , |
| Format: | IHS Series NonPeerReviewed |
| Sprache: | Englisch |
| Veröffentlicht: |
Institut für Höhere Studien
2003
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| Zusammenfassung: | Abstract: Starting a firm with expansive potential is an option for educated and high-skilled workers. This option serves as an insurance against unemployment caused by labor market frictions and hence increases the incentives for education. We showwithin a matching model that reducing the start-up costs for new firms results in higher take-up rates of education. It also leads, through a thick-market externality, to higher rates of job creation for high-skilled labor as well as average match productivity. We provide empirical evidence to support our argument.; |
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