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Title:Reducing Start-Up Costs for New Firms: The Double Dividend on the Labour Market PDF Logo
Authors:Dulleck, Uwe
Frijters, Paul
Winter-Ebmer, Rudolf
Issue Date:2003
Series/Report no.:IZA Discussion paper series 923
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 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.
Subjects:matching
education
start-up costs
venture capital
bureaucratic hurdles
JEL:D73
J68
J24
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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