We study the effects of business start-up costs on employment, in a model with managers, workers and matching. We show that higher start-up costs discourage entrepreneurs and increase the fraction of the population who become workers. Job creation suffers and employment settles at a lower level. We illustrate with evidence from major OECD economies, where large variations in start-up costs are correlated with large variations in employment levels. © 2001 Elsevier Science B. V. All rights reserved.
CITATION STYLE
Fonseca, R., Lopez-Garcia, P., & Pissarides, C. A. (2001). Entrepreneurship, start-up costs and employment. European Economic Review, 45(4–6), 692–705. https://doi.org/10.1016/S0014-2921(01)00131-3
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