Employment protection laws deter highly educated individuals from self-employment.
The article explores how education and job security laws affect people's choice to start their own business. Job security laws can impact income from regular jobs, influencing whether someone decides to become self-employed. The study shows that education level and job security laws interact in determining self-employment decisions. Data from OECD countries suggest a negative interaction between education and job security laws, affecting self-employment rates. Only by considering this interaction can we understand the true impact of job security laws on self-employment.