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I build a large-firm model of the labor market with matching frictions and firm turnover. Firms hire bothlabor and capital. The model allows me to assess the impact of two regulatory frictions on unemployment:i the administrative costs of establishing a new firm and ii the share of capital entrepreneurs recoverwhen exiting. These regulations explain half the unemployment gap between Continental Europe and theUnited States in the calibrated model. More precisely, exit regulation is responsible for the entire explainedgap, with entry regulation playing no role. The degree of returns to scale and the presence of fixed capitalin the model are important assumptions behind these results.Nota general

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Author: Janiak, Alexandre; -

Source: http://repositorio.uchile.cl/



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