Entrepreneurship, Asymmetric Information and Unemployment
AbstractWe 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.
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Bibliographic InfoPaper provided by CREFE, Université du Québec à Montréal in its series Cahiers de recherche CREFE / CREFE Working Papers with number 57.
Length: 31 pages
Date of creation: Jan 1998
Date of revision:
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More information through EDIRC
entrepreneurship; unemployment; occupational choice;
Other versions of this item:
- Robin Boadway & Nicolas Marceau & Maurice Marchand & Marianne Vigneault, 1998. "Entrepreneurship, Asymmetric Information, and Unemployment," International Tax and Public Finance, Springer, vol. 5(3), pages 307-327, July.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
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