%0 Report
        %A Cockx, Bart
%A Desiere, Sam
        %T Labour Costs and the Decision to Hire the First Employee
        %D 2023
        %8 2023 May
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 16122
        %U https://www.iza.org/index.php/publications/dp16122
        %X Firms without paid employees account for up to 80% of all firms, but only a small minority ever hires. This paper investigates the relationship between labour costs and the decision to hire a first employee and become an employer. Leveraging a unique policy in Belgium that permanently reduced the labour cost of the first employee by 13%, we find that the number of new, first-time employers jumped by 31% immediately following the reform. The elasticity of the probability to hire the first employee with respect to the labour cost is −2.39 [95% CI: −3.45, −1.25].
        %K payroll taxes
%K hiring decisions
%K nonemployers
%K small businesses