Reducing Start-Up Costs for New Firms: The Double Dividend on the Labour Market

Rudolf Winter-Ebmer, Uwe Dulleck and Paul Frijters

No 4172, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 labour 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 labour as well as average match productivity. We provide empirical evidence to support our argument.

Keywords: Matching; Education; Start-up costs; Venture capital (search for similar items in EconPapers)
JEL-codes: D73 J24 J68 (search for similar items in EconPapers)
Date: 2004-01
New Economics Papers: this item is included in nep-ent and nep-mic
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Related works:
Journal Article: Reducing Start‐up Costs for New Firms: The Double Dividend on the Labor Market* (2006)
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 labor market (2003)
Working Paper: Reducing Start-up costs for New Firms: The Double Dividend on the Labor Market (2003)
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