Publications
Publications
- 2009
Labor Regulations and European Private Equity
By: Ant Bozkaya and William R. Kerr
Abstract
European nations substitute between employment protection regulations and labor market expenditures (e.g., unemployment insurance benefits) for providing worker insurance. Employment regulations more directly tax firms making frequent labor adjustments than other labor insurance mechanisms. Venture capital and private equity investors are especially sensitive to these labor adjustment costs. Nations favoring labor expenditures as the mechanism for providing worker insurance developed stronger private equity markets in high volatility sectors over 1990–2004. These patterns are further evident in U.S. investments into Europe. In this context, policy mechanisms are more important than the overall insurance level provided.
Keywords
Employment; Governing Rules, Regulations, and Reforms; Taxation; Insurance; Investment; Venture Capital; Private Equity; Europe
Citation
Bozkaya, Ant, and William R. Kerr. "Labor Regulations and European Private Equity." NBER Working Paper Series, No. 15627, December 2009.