Regs and small business

A Dec. 11 news release from the Rand Corporation announced the publication of a report from the Kauffman-RAND Institute for Entrepreneurship Public Policy, In the Name of Entrepreneurship? The Logic and Effects of Special Regulatory Treatment for Small Business, on the impact of regulations on small business. Among the issues examined are regs in four key areas--health insurance, workplace safety, corporate governance and business organization. In conjunction with the report, Rand also issued three related research briefs:

Do Benefits of Sarbanes-Oxley Justify the Costs?: Empirical Evidence in the Case of Small Firms. Rand reviewed the effects of the Sarbanes-Oxley Act of 2002 (SOX), PL 107-204 (pdf, 66pp), in three measurable areas: (1) compliance costs for small firms compared with large firms, (2) stock-price reactions, and (3) leaving the public market. It appears that "SOX, at least initially, had a number of negative effects on small firms."

Is Special Regulatory Treatment for Small Businesses Working as Intended? Among the findings:
  • Small firms respond differently from large firms to regs
  • Regs designed to help small businesses don't always have the intended effect
  • It might be better to balance regulatory restrictions with encouraging entrepreneurship
  • When regs aren't working, policymakers can monitor or modify them, help small businesses to comply, or rescind the legislation
State Insurance Mandates and Consumer-Directed Health Plans: Are They Helping Small Business Provide Health Insurance to Employees? Among the findings:
  • No evidence that state mandates or consumer-directed health plans (CDHPs) have made health insurance for small businesses more accessible or affordable
  • Some small firms adjust their size to avoid the regulated market
  • New solutions, such as small-business purchasing pools, should be explored
  • The changing marketplace for CDHPs should be monitored



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