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on Labour Economics |
| By: | Jean-Pierre Danthine; André Kurmann |
| Date: | 2005–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:784828000000000299&r=lab |
| By: | Galina Vereshchagina |
| Abstract: | Empirical studies document differences in firms' response to the introduction of various labor market policies. In particular, large and mature firms tend to participate more actively in targeted employment subsidy programs (under which firms receive subsidies for hiring disadvantaged workers). This paper offers an explanation for this phenomenon and argues that it might have important consequences for policy making. Namely, such behavior of firms may indicate that large and mature firms benefit from the introduction of a new subsidy program, while small and young firms incur indirect costs. In this case, the policy implicitly redistributes profit from young to mature firms and may discourage startups if the entry into the industry is competitive. The resulting decrease in the number of operating firms is likely to have a significant impact on the policy's outcomes. These effects become more pronounced as heterogeneity between young and mature firms increases. |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp268&r=lab |
| By: | Claudio Michelacci; Olmo Silva (CEMFI, Centro de Estudios Monetarios y Financieros) |
| Abstract: | We document that the fraction of entrepreneurs who work in the region where they were born is significantly higher than the corresponding fraction for dependent workers. This difference is more pronounced in more developed regions and positively related to the degree of local financial development. Frims created by locals are more valuable and bigger (in terms of capital and employment), operate with more capital intensive technologies, and are able to obtain greater financing per unit of capital invested, than firms created by non-locals. This evidence suggests that there are so many local entrepreneurs because locals can better exploit the financial opportunities available in the region where they were born. This can help explaining how local financial development cause presistent disparities in entrepreneurial activity, technology, and income. |
| Keywords: | Entreprenurship, economic and financial development, social capital. |
| JEL: | J23 O12 O16 Z13 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2005_0506&r=lab |