Company start-up costs and employment

Pissarides, Christopher ORCID: 0000-0002-0695-058X (2002) Company start-up costs and employment. CEP discussion paper; CEPDP0520 (520). London School of Economics and Political Science. Centre for Economic Performance, London, UK. ISBN 0-75-301920-5

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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.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk
Additional Information:	© 2002 Christopher A. Pissarides
Divisions:	Centre for Economic Performance Economics
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Date Deposited:	27 Apr 2007
Last Modified:	11 Sep 2025 03:50
URI:	http://eprints.lse.ac.uk/id/eprint/2200

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