TY  - RPRT
        AU  - Cockx, Bart
AU  - Desiere, Sam
        TI  - Labour Costs and the Decision to Hire the First Employee
        PY  - 2023/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16122
        UR  - https://www.iza.org/publications/dp16122
        AB  - 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].
        KW  - payroll taxes
KW  - hiring decisions
KW  - nonemployers
KW  - small businesses
        ER  -