Firm Entry Deregulation, Competition and Returns to Education and Skill
37 Pages Posted: 9 Jul 2013
Date Written: July 2013
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%.
Keywords: Entry Deregulation, Product Market Competition, Returns to Education, Wage Structure
JEL Classification: J3
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