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Labour market performance and start-up costs: OECD evidence

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  • Lopez-Garcia, Paloma

Abstract

This paper is intended to make a contribution to the empirical literature explaining the rise of unemployment since the 1970s in western economies by means of interactions between shocks and institutions. The contribution is twofold. First, the impact of a general feature of developed economies that has been surprisingly neglected in the literature is analyzed, namely, the employment shift from industry and agriculture to services. The second contribution of the paper is the focus on the interaction of that shock with the administrative burdens on firm creation. The working hypothesis is that countries that impose high costs on the creation of new companies are not able to create enough jobs in the service sector to successfully absorb the workers released from the agriculture and industry sector. The result is higher unemployment.

Suggested Citation

  • Lopez-Garcia, Paloma, 2002. "Labour market performance and start-up costs: OECD evidence," LSE Research Online Documents on Economics 20059, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:20059
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    File URL: http://eprints.lse.ac.uk/20059/
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    Citations

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    Cited by:

    1. Paloma Lopez-Garcia, 2002. "Labour Market Performance and Start-Up Costs: OECD Evidence," CEP Discussion Papers dp0565, Centre for Economic Performance, LSE.
    2. Winfried Koeniger & Julien Prat, 2007. "Employment Protection, Product Market Regulation and Firm Selection," Economic Journal, Royal Economic Society, vol. 117(521), pages 302-332, June.
    3. Christopher A. Pissarides, 2003. "Unemployment in Britain: A European Success Story," CESifo Working Paper Series 981, CESifo.
    4. Lei Fang & Richard Rogerson, 2011. "Product Market Regulation and Market Work: A Benchmark Analysis," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(2), pages 163-188, April.
    5. Ruta Aidis & Tomasz Mickiewicz, 2006. "Entrepreneurs, expectations and business expansion: Lessons from Lithuania," Europe-Asia Studies, Taylor & Francis Journals, vol. 58(6), pages 855-880.
    6. repec:hal:wpspec:info:hdl:2441/9081 is not listed on IDEAS
    7. D'Agostino, Antonello & Serafini, Roberta & Ward-Warmedinger, Melanie E., 2006. "Sectoral Explanations of Employment in Europe: The Role of Services," IZA Discussion Papers 2257, Institute of Labor Economics (IZA).
    8. repec:spo:wpmain:info:hdl:2441/9081 is not listed on IDEAS
    9. Rutkowski, Jan, 2004. "Firms, jobs, and employment in Moldova," Policy Research Working Paper Series 3253, The World Bank.
    10. repec:spo:wpecon:info:hdl:2441/9081 is not listed on IDEAS
    11. Christopher Pissarides & Pietro Garibaldi & Claudia Olivetti & Barbara Petrongolo & Etienne Wasmer, 2003. "Women in the Labour Force: How Well is Europe Doing?," Post-Print hal-03588626, HAL.
    12. Linzert, Tobias, 2005. "The Unemployment Inflation Trade-Off in the Euro Area," IZA Discussion Papers 1699, Institute of Labor Economics (IZA).
    13. Lei Fang & Richard Rogerson, 2009. "Policy Analysis In A Matching Model With Intensive And Extensive Margins," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(4), pages 1153-1168, November.
    14. Raquel Fonseca & Natalia Utrero González, 2004. "Do Market Regulation and Financial Imperfections Affect Firm Size? New Empirical Evidence," CSEF Working Papers 119, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    15. Jan J. Rutkowski & Stefano Scarpetta, 2005. "Enhancing Job Opportunities : Eastern Europe and the Former Soviet Union," World Bank Publications - Books, The World Bank Group, number 7408.
    16. Ruta Aidis & Tomasz Marek Mickiewicz, 2005. "Growth expectations of business owners: impact of human capital, firm characteristics and environmental transition," UCL SSEES Economics and Business working paper series 50, UCL School of Slavonic and East European Studies (SSEES).
    17. repec:hal:spmain:info:hdl:2441/9081 is not listed on IDEAS

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    More about this item

    Keywords

    Macroeconomics of unemployment; Panel data; Startup costs.;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • K2 - Law and Economics - - Regulation and Business Law
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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