Reducing Start-up Costs for New Firms: The Double Dividend on the Labor Market

Dulleck, Uwe and Frijters, Paul and Winter-Ebmer, Rudolf (November 2003) Reducing Start-up Costs for New Firms: The Double Dividend on the Labor Market. IHS Economics Series 146

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Abstract or Table of Contents

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.;

Item Type: IHS Series
Keywords: 'Matching' 'Education' 'Start-up costs' 'Venture capital' 'Bureaucratic hurdles'
Classification Codes (e.g. JEL): J24, D73, J68
Status: Published
Date Deposited: 26 Sep 2014 10:37
Last Modified: 22 Jul 2017 04:45
URI: http://irihs.ihs.ac.at/id/eprint/1530

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