We develop a model of sluggish firm entry to explain short-run labor responses to technology shocks. We show that the labor response to technology and its persistence depend on the degree of returns to labor and the rate of firm entry. Existing empirical results support our theory based on...

Certificate-of-need (CON) laws disallow hospitals, nursing homes, ambulatory surgical centers (ASCs), and other healthcare providers from entering new markets, expanding their practice, or making certain capital investments without first receiving approval from state regulators. These laws are...