Discussion Paper Details

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Title: Firm Entry Deregulation, Competition and Returns to Education and Skill

Author(s): Ana Fernandes, Priscila Ferreira and L. Alan Winters

Publication Date: July 2013

Keyword(s): Entry Deregulation, Product Market Competition, Returns to Education and Wage Structure

Programme Area(s): International Trade and Regional Economics

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%.

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Bibliographic Reference

Fernandes, A, Ferreira, P and Winters, L. 2013. 'Firm Entry Deregulation, Competition and Returns to Education and Skill'. London, Centre for Economic Policy Research.