Lee Branstetter, Francisco Lima, Lowell Taylor, Ana Venâncio, 18 September 2014

Business groups and their political allies advocate deregulation as a pathway to faster growth, pointing to a strong negative relationship between regulatory barriers to entry and economic performance. This column argues that cross-sectional estimates have oversold the strength of this relationship and its implications for policy. Quasi-experimental evidence from a Portuguese policy reform shows that deregulation matters, but its impact is limited – it is not the panacea that pundits proclaim it to be.

Ana Fernandes, Priscila Ferreira, L Alan Winters, 09 September 2013

Deregulating firm entry is usually good for firms. But what about their workers? This column presents new research on the deregulation of firm entry and how it affects different types of workers. Using a natural experiment from Portugal, the evidence suggests that deregulating firm entry appears to boost competition and employment (and possibly aggregate income) but its gains seem largely to be reaped by better-off, better-educated workers.

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