Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)
National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)
NBER Working Paper No. w8211
Does entry regulation hinder job creation? We investigate this question in the context of the French retail industry, a sector that has experienced especially low rates of job creation over the last 25 years. Since the early 70s, the French government has required regional zoning board approval for the creation or extension of any large retail store. Using a unique database that provides time and regional variation in boards' approval decisions, we show that this requirement created barriers to entry in the retail sector. We also show that these barriers to entry, either measured directly by approval rates or predicted by the political composition of the boards, weakened employment growth in the retail industry. Our findings indicate that retail employment could have been more than 10% higher today had entry regulation not been introduced. Promoting product market competition may thus be a key reform for countries with poor employment performance.
Number of Pages in PDF File: 47working papers series
Date posted: March 29, 2001
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