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Contracting Out, Public Policy And Entrepreneurship

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  • Simon C. Parker

Abstract

Relatively little is known about the impact of public policies on the decisions of firms to contract out parts of their production, despite widespread growth in this practice. The present paper uses a simple principal‐agent model to explore the effects of various public policies which affect employers' incentives to outsource by re‐grading their employees as independent self‐employed contractors. Minimum wages are predicted to increase contracting out, as are payroll and income taxes under several plausible conditions, including worker preferences exhibiting constant relative risk aversion.

Suggested Citation

  • Simon C. Parker, 2010. "Contracting Out, Public Policy And Entrepreneurship," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(2), pages 119-144, May.
    • Handle: RePEc:bla:scotjp:v:57:y:2010:i:2:p:119-144
    DOI: 10.1111/j.1467-9485.2010.00510.x
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    Cited by:

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    2. Ganserer, Angelika & Gregory, Terry & Zierahn, Ulrich, 2022. "Minimum wages and the rise in solo self-employment," ZEW Discussion Papers 22-024, ZEW - Leibniz Centre for European Economic Research.
    3. Mikael Stenkula, 2012. "Taxation and entrepreneurship in a welfare state," Small Business Economics, Springer, vol. 39(1), pages 77-97, July.
    4. Nachiket Bhawe & Shaker A. Zahra & Chen Chao & Garry D. Bruton, 2021. "Protectionist policies and diversity of entrepreneurial types," Small Business Economics, Springer, vol. 56(2), pages 789-807, February.
    5. repec:ces:ifodic:v:14:y:2016:i:3:p:19255698 is not listed on IDEAS
    6. Ana Millán & José María Millán & Concepción Román, 2016. "The Role of Start-up Incentives on Entrepreneurship Dynamics in a Post-Crisis Era: Evidence from European Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(3), pages 29-35, October.
    7. Lukas Held & Andrea M. Herrmann & Allard Mossel, 2018. "Team formation processes in new ventures," Small Business Economics, Springer, vol. 51(2), pages 441-464, August.
    8. Concepción Román & Emilio Congregado & José Millán, 2011. "Dependent self-employment as a way to evade employment protection legislation," Small Business Economics, Springer, vol. 37(3), pages 363-392, October.
    9. Ana Millán & José María Millán & Concepción Román, 2016. "The Role of Start-up Incentives on Entrepreneurship Dynamics in a Post-Crisis Era: Evidence from European Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(03), pages 29-35, October.

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