Comments to “Do entry Regulations deter Entrepreneurship and Job Creation?: Evidence from Recent Reforms in Portugal” Carmen Pagés March 2011

What does the paper do? Evaluates experience of deregulation in Portugal using a D-D methodology. It uses the fact that the program starts at different times in different municipalities. It compares firm entry, employment in newly created firms and survival of new firms in ´treated´vs ´untreated´ municipalities. It also assesses the characteristics of firms and their entrepreneurs for firms created after deregulation.

What do they find? The introduction of one stop shops is associated with 17% increase in firm entry and a 22% increase in employment in new firms. The increase comes from firms of 2 and 3-5 employees. No change for firms >5. Firms which started after program had lower survival rates (4 pp. less) Increase in entry of female, older, and less educated entrepreneurs.

Are the results convincing? D-D methodology used already in similar papers: Bruhn 2008; Kaplan et al, forthcoming. It does not specify # of “controls”. How many counties without change? It uses two types of specifications: – Z cmy = 1 from opening month afterwards, o otherwise. – Full set of dummies: Z lc =1, l=-10….,0,1,…10, for example Z -1c =1 in the month prior to the opening of one stop shop

Does is start before?

Are the results convincing? Could run with a trend, to assess impact of other factors that lead towards higher firm entry in this period. What happens when period FE are introduced? Probability of being an entrepreneur less than LPM bad approximation in the extremes. Coud use a triple D-D-D model using as controls the industries in table A.1 (excluded).

Could also examine: Were these workers/firms already active but unregistered/informal? – More likely given the types of firms that registered – Were the entrepreneurs employees before? What happened to overall employment? – Did employment in continuing establishments decline as a consequence of increased competition? Are the results big/small? – How much does imply in terms of % of total employment/economic activity?

In conclusion A very nice paper with a very nice dataset… – Want to know more!

THANKS!