Company start-up costs and employment

Christopher Pissarides

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: I study the role of company start-up costs for employment performance. The model is search equilibrium with a new concept for firms. Agents have an innate managerial ability and make a career choice to become either managers or workers. Manage rs set up firms, post jobs and match with workers. I show that in equilibrium career choice and job creation are jointly determined. Higher start-up costs reduce overall employment but increase the size of incumbent firms. I discuss some cross-country OECD evidence which supports the model’s main proposition.

Keywords: Start-up costs; regulation; employment; OECD unemployment; search and matching. (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2002-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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http://eprints.lse.ac.uk/2200/ Open access version. (application/pdf)

Related works:
Working Paper: Company Start-Up Costs and Employment (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:2200

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