What is the impact of labour market institutions on entrepreneurial activity? Recently it has been argued that flexible labour market institutions have a positive influence on entrepreneurial activity. No doubt, labour mobility is an important condition for entrepreneurship.
The institutions governing the allocation of labour and talent in society enable entrepreneurs to develop their businesses and affect the willingness of employees to be(come) entrepreneurial. We analyse these institutions by reviewing labour market regulation in European countries from a historical perspective. We focus on three pillars: regulation of labour markets, wage-setting institutions and social insurance systems.