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

Paul Frijters (), Uwe Dulleck () and Rudolf Winter-Ebmer ()

Paul Frijters Discussion Papers from School of Economics and Finance, Queensland University of Technology

Abstract: Starting a firm with expansive potential is an option for educated and high-skilled workers. If there are labor market frictions, this additional option can be seen as reducing the chances of ending up in a low-wage job and hence as increasing the incentives for education. In a matching model, we show that reducing the start-up costs for new firms results in higher take-up rates of education. It also gives rise—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.

Keywords: Matching; education; start-up costs; venture capital; bureaucratic hurdles (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-edu, nep-ent and nep-lab
Date: 2006-06-15
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http://www.bus.qut.edu.au/paulfrijters/documents/sjoe_455_LR.pdf (application/pdf)

Related works:
Working Paper: Reducing start-up costs for New Firms: The double dividend on the labor market (2003)
Working Paper: Reducing Start-Up Costs for New Firms: The Double Dividend on the Labour Market (2003)
Working Paper: Reducing Start-Up Costs for New Firms: The Double Dividend on the Labour Market (2004)
Working Paper: Reducing Start-up Costs for New Firms: The Double Dividend on the Labor Market (2003)
Working Paper: Reducing Start-up costs for New Firms: The Double Dividend on the Labor Market (2003)
Journal Article: Reducing Start-up Costs for New Firms: The Double Dividend on the Labor Market (2006)
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