Advanced Search
MyIDEAS: Login to save this paper or follow this series

Entrepreneurship, Asymmetric Information and Unemployment

Contents:

Author Info

  • Robin Boadway

    ()
    (Department of Economics, Queen's University)

  • Nicolas Marceau

    ()
    (Center for Research on Economic Fluctuations and Employment, UQAM)

  • Maurice Marchand

    ()
    (IAG, Universite Catholique de Louvain, and CORE)

  • Marianne Vigneault

    ()
    (Department of Economics, Bishop's University)

Abstract

We examine how three sources of asymmetric information affect the supply of entrepreneurs and unemployment. In the first case, banks cannot observe entrepreneurs' risk of failure so ration credit. This increases the number of entrepreneurs and the level of unemployment. In the second case, firms cannot observe workers' effort so offer a wage above the market clearing one. This results in unemployment and too few entrepreneurs. The final case arises when firms cannot observe workers' abilities. A pooling wage is offered and results in too many entrepreneurs. The role of government in restoring efficiency is explored Dans ce texte, nous étudions l'impact de trois formes d'asymétrie d'information sur l'entrepreneurship et le chômage. Dans le premier cas, les banques ne peuvent observer la probabilité qu'un entrepreneur fasse faillite, ce qui les conduit à restreindre l'accès au crédit. Cela cause un accroissement du nombre d'entrepreneurs et du chômage. Dans un deuxième cas, les firmes ne peuvent observer l'effort de leurs travailleurs et offrent alors un salaire d'efficience. D'un tel salaire résulte du chômage et un trop petit nombre d'entrepreneurs. Dans le dernier cas, les firmes ne peuvent observer l'habileté de leurs travailleurs. Un même salaire est alors offert à tous les travailleurs, ce qui conduit à un trop grand npmbre d'entrepreneurs. Nous étudions les formes d'intervention gouvernementale permettant d'accroître l'efficacité.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.unites.uqam.ca/eco/CREFE/cahiers/cah57.ps
Our checks indicate that this address may not be valid because: 404 Not Found (http://www.unites.uqam.ca/eco/CREFE/cahiers/cah57.ps [301 Moved Permanently]--> http://www.economie.uqam.ca/CREFE/cahiers/cah57.ps [301 Moved Permanently]--> http://economie.esg.uqam.ca/CREFE/cahiers/cah57.ps). If this is indeed the case, please notify (Stéphane Pallage)
File Function: Main text
Download Restriction: no

File URL: http://www.unites.uqam.ca/eco/CREFE/cahiers/cah57.pdf
Our checks indicate that this address may not be valid because: 500 Internal Server Error (http://www.unites.uqam.ca/eco/CREFE/cahiers/cah57.pdf [301 Moved Permanently]--> http://www.economie.uqam.ca/CREFE/cahiers/cah57.pdf [301 Moved Permanently]--> http://economie.esg.uqam.ca/CREFE/cahiers/cah57.pdf). If this is indeed the case, please notify (Stéphane Pallage)
File Function: Main text
Download Restriction: no

Bibliographic Info

Paper provided by CREFE, Université du Québec à Montréal in its series Cahiers de recherche CREFE / CREFE Working Papers with number 57.

as in new window
Length: 31 pages
Date of creation: Jan 1998
Date of revision:
Handle: RePEc:cre:crefwp:57

Contact details of provider:
Postal: P.O. Box 8888, Downtown Station, Montreal (Canada) Quebec, H3C 3P8
Phone: (514) 987-6181
Fax: (514) 987-8494
Email:
Web page: http://ideas.uqam.ca/CREFE/
More information through EDIRC

Related research

Keywords: entrepreneurship; unemployment; occupational choice;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-48, August.
  2. Richard Arnott & Joseph Stiglitz, 1991. "Equilibrium in Competitive Insurance Markets with Moral Hazard," NBER Working Papers 3588, National Bureau of Economic Research, Inc.
  3. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
  4. BOADWAY, Robin & MARCHAND, Maurice & PESTIEAU, Pierre, . "Optimal linear income taxation in models with occupational choice," CORE Discussion Papers RP -958, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Besanko, David & Thakor, Anjan V., 1987. "Competitive equilibrium in the credit market under asymmetric information," Journal of Economic Theory, Elsevier, vol. 42(1), pages 167-182, June.
  6. Marc Cowling & Mark Taylor & Peter Mitchell, 2004. "Job Creators," Manchester School, University of Manchester, vol. 72(5), pages 601-617, 09.
  7. Aghion, Philippe & Howitt, Peter, 1991. "Growth and Unemployment," CEPR Discussion Papers 577, C.E.P.R. Discussion Papers.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Christian Keuschnigg & Soren Bo Nielsen, 2000. "Tax Policy, Venture Capital, and Entrepreneurship," NBER Working Papers 7976, National Bureau of Economic Research, Inc.
  2. Mikko Leppämäki & Vesa Kanniainen, 2000. "Entrepreneurship in a Unionised Economy," CESifo Working Paper Series 379, CESifo Group Munich.
  3. Oana Secrieru & Marianne Vigneault, 2004. "Public Venture Capital and Entrepreneurship," Working Papers 04-10, Bank of Canada.
  4. Robin Boadway & Michael Keen, 2004. "Financing New Investments under Asymmetric Information: a General Approach," Cahiers de recherche 0407, CIRPEE.
  5. Robin Boadway & Jean-François Tremblay, 2003. "Public Economics and Startup Entrepreneurs," CESifo Working Paper Series 877, CESifo Group Munich.
  6. Mirjam van Praag, 2003. "Initial Capital Constraints Hinder Entrepreneurial Venture Performance: An empirical analysis," CESifo Working Paper Series 887, CESifo Group Munich.
  7. Pekka Ilmakunnas & Vesa Kanniainen, 2001. "Entrepreneurship, Economic Risks, and Risk Insurance in the Welfare State: Results with OECD Data 1978-93," German Economic Review, Verein für Socialpolitik, vol. 2(3), pages 195-218, 08.
  8. Kar, Saibal, 2009. "International labor migration, asymmetric information and occupational choice," MPRA Paper 24106, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cre:crefwp:57. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stéphane Pallage).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.