Firm Entry Deregulation, Competition and Returns to Education and Skill

Ana Fernandes, Priscila Ferreira () and L. Winters

No 48, NIMA Working Papers from Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho

Abstract: This paper studies the effect of firm entry deregulation on the returns to skill and education. We use matched employer-employee data for the universe of workers and firms in Portugal and exploit a comprehensive episode of entry deregulation, unique in the industrialized world, as a quasi-natural experiment to investigate how increased competition affects wages. We find that after the reform the returns to a university degree increased by around 5 percent and the returns to skills increased by around 3 percent. We include match (worker-firm) fixed effects and thus identify the effect from individuals who stay in the same firm after the reform. Results are therefore not driven by changes in employment composition, and are supportive of education and skill becoming more valuable after the reform.

Keywords: Entry; Deregulation; Product Market Competition; Wage Structure; Returns to Education (search for similar items in EconPapers)
JEL-codes: J3 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013-04
New Economics Papers: this item is included in nep-bec, nep-edu, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Firm entry deregulation, competition and returns to education and skill (2014)
Working Paper: Firm Entry Deregulation, Competition and Returns to Education and Skill (2013)
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