DP9550 Firm Entry Deregulation, Competition and Returns to Education and Skill
|Author(s):||Ana Fernandes, Priscila Ferreira, L. Alan Winters|
|Publication Date:||July 2013|
|Keyword(s):||Entry Deregulation, Product Market Competition, Returns to Education, Wage Structure|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=9550|
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%.