Reducing Start-Up Costs for New Firms: The Double Dividend on the Labour Market

Arbeitspapier

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 show within 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 923

Classification and Topics

• Classification: Wirtschaft ; Bureaucracy; Administrative Processes in Public Organizations; Corruption ; Mobility, Unemployment, and Vacancies: Public Policy ; Human Capital; Skills; Occupational Choice; Labor Productivity
• Subject: matching ; education ; start-up costs ; venture capital ; bureaucratic hurdles ; Unternehmensgründung ; Folgekosten ; Risikokapital ; Bildungsinvestition ; Hochqualifizierte Arbeitskräfte ; Arbeitsnachfrage ; Theorie ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dulleck, Uwe ; Frijters, Paul ; Winter-Ebmer, Rudolf
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/20158
• Last update: 10.03.2025, 11:43 AM CET