Entry Barriers and the Labor Market Outcomes of Incumbent Workers: Evidence from a Deregulation Reform in the German Crafts Sector
We study the labor market outcomes of a deregulation reform in Germany that removed licensing requirements to become self-employed in some occupations. Using longitudinal social security data, we implement a matched difference-in-differences design with entropy balancing to account for observable characteristics and unobserved individual heterogeneity. The reform tripled the number of businesses within ten years and led to slower earnings growth and higher unemployment for incumbent workers in deregulated occupations. However, the reform effect seems rather small, which we attribute to the relatively low competitiveness of new businesses. Supporting this view, the reform did not lead to overall employment growth.
Year of publication: |
2018
|
---|---|
Authors: | Lergetporer, Philipp ; Ruhose, Jens ; Simon, Lisa |
Publisher: |
Bonn : Institute of Labor Economics (IZA) |
Subject: | deregulation | entry barriers | self-employment | labor market outcomes | entropy balancing | matched difference-in-differences |
Saved in:
freely available
Series: | IZA Discussion Papers ; 11857 |
---|---|
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 1036451240 [GVK] hdl:10419/185317 [Handle] RePEc:iza:izadps:dp11857 [RePEc] |
Classification: | J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; J24 - Human Capital; Skills; Occupational Choice; Labor Productivity ; L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms |
Source: |
Persistent link: https://www.econbiz.de/10011931822