@techreport{6a100a8210a54489bc82644d5fc2b4ae,
title = "Labour costs and the decision to hire the first employee",
abstract = "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].",
keywords = "nonemployers, hiring decisions, payroll taxes, small businesses",
author = "B. Cockx and Sam Desiere",
year = "2023",
month = jun,
day = "6",
doi = "10.26481/umaror.2023001",
language = "English",
series = "ROA Research Memoranda",
publisher = "ROA",
number = "001",
address = "Netherlands",
type = "WorkingPaper",
institution = "ROA",
}