Regulatory costs and competition
Understanding the effects of regulation on start-up activity and wage inequality
Regulatory costs can be a significant financial burden for smaller enterprises; not only disincentivising entrepreneurial activity but also causing wage inequality and friction between large and small companies. By scrutinising documents pertaining to all federal rules and regulations, this research shows that the regulatory burden on businesses in the US has been substantially increasing, with small entities bearing higher regulatory costs per employee. The study highlights how lobbying by large firms has prolonged this friction and helps reveal the causes and effects of regulation on wage inequality.