Working Paper: CEPR ID: DP9550
Authors: Ana P. Fernandes; Priscila Ferreira; L. Alan Winters
Abstract: This paper investigates the effects of firm entry deregulation. We exploit a recent reform that simplified business entry in Portugal as a quasi-natural experiment. We use cross-municipality-year variation in the implementation of the reform for identification. Using matched employer-employee data for the universe of workers and firms, we find that the reform is associated with increased firm entry and competition within industries and regions. The returns to a university degree increased by 5% while the returns to skills increased by 3%.
Keywords: entry; deregulation; product market competition; returns to education; wage structure
JEL Codes: J3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reform (P41) | Increase in firm entry (L26) |
| Reform (P41) | Increase in competition (L13) |
| Increase in competition (L13) | Increase in wage premiums for education (J39) |
| Reform (P41) | Increase in wage premiums for education (J39) |