I present a theory on the relationship between educational choice and entrepreneurship in a labour market with asymmetric information. The model shows that, in a labour market where education is used as a signalling device, an imperfect relationship between productivity in education and in the...

This paper studies the effects of income taxation on entrepreneurship, empirically and in a structural macro model with entrepreneurial choice. Combining state-level tax data with household and firm data we document that higher and more progressive taxation has a strong negative impact on...