Labour costs and the decision to hire the first employee

Bart Cockx and Sam Desiere

No 1, ROA Research Memorandum from Maastricht University, Research Centre for Education and the Labour Market (ROA)

Abstract: Firms without paid employees account for up to 80% of all firms, but only a small minority ever hires. This paper investigates the relationship between labour costs and the decision to hire a first employee and become an employer. Leveraging a unique policy in Belgium that permanently reduced the labour cost of the first employee by 13%, we find that the number of new, first-time employers jumped by 31% immediately following the reform. The elasticity of the probability to hire the first employee with respect to the labour cost is −2.39 [95% CI: −3.45, −1.25].

JEL-codes: D22 H25 J08 J23 L26 M13 (search for similar items in EconPapers)
Date: 2023-06-06
New Economics Papers: this item is included in nep-lma and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://cris.maastrichtuniversity.nl/ws/files/139821150/ROA_RM_2023_1.pdf (application/pdf)

Related works:
Journal Article: Labour costs and the decision to hire the first employee (2024)
Working Paper: Labour Costs and the Decision to Hire the First Employee (2023)
Working Paper: Labour costs and the decision to hire the first employee (2023)
Working Paper: Labour Costs and the Decision to Hire the First Employee (2023)
Working Paper: Labour costs and the decision to hire the first employee (2023)
Working Paper: Labour costs and the decision to hire the first employee (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:unm:umaror:2023001

DOI: 10.26481/umaror.2023001

Access Statistics for this paper

More papers in ROA Research Memorandum from Maastricht University, Research Centre for Education and the Labour Market (ROA) Contact information at EDIRC.
Bibliographic data for series maintained by Andrea Willems () and Leonne Portz ().