Template-type: ReDif-Paper 1.0
Author-Name: Cockx, B.
Author-Name: Desiere, Sam
Title: Labour costs and the decision to hire the first employee
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].
Classification-JEL: d22,h25,j08,j23,l26,m13
Series: ROA Research Memoranda
Creation-Date: 20230606
Number: 001
File-URL: https://cris.maastrichtuniversity.nl/ws/files/139821150/ROA_RM_2023_1.pdf
File-Format: application/pdf
File-Size: 1281911
Handle: Repec:unm:umaror:2023001
DOI: 10.26481/umaror.2023001