Company start-up costs and employment

Pissarides, Christopher (2002) Company start-up costs and employment. CEP discussion paper; CEPDP0520, 520. Centre for Economic Performance, London School of Economics and Political Science, 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
Library of Congress subject classification:	H Social Sciences > HD Industries. Land use. Labor
Sets:	Collections > Economists Online Research centres and groups > Centre for Economic Performance (CEP) Departments > Economics
Identification Number:	520
Date Deposited:	27 Apr 2007
URL:	http://eprints.lse.ac.uk/2200/

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