Self-Employment and Business Cycles: Searching for Asymmetries in a Panel of 23 Oecd Countries

Abstract

The aim of this work is to identify whether the bidirectional relationship between entrepreneurship cycles and output gaps is asymmetric depending on the phase of the business cycle. To this end, we employ a panel threshold regression model in which different relations can prevail in each regime, defined by the values of the threshold variable. The findings of this article qualify previous empirical results. In particular, our estimates provide support for the existence of different responses – both in terms of sign and magnitude – of cyclical self-employment to output growth and of output growth to cyclical self-employment, depending on the value of the threshold variable. The result is highly important for policy makers and practitioners given that whether they ignore the asymmetric impact that an entrepreneurship promotion policy action might have on the real economy, the action might lead to unexpected effects.

Persistence in Self-Employment Rates before the Great Lockdown: The Case of the UK

“…We also report estimates (Table 4) of our baseline unobserved linear component model, substituting GDP by the unemployment rate, in order to check the robustness and whether the cyclical pattern of self-employment is also linked to the labor market evolution. The results point to this positive effect of unemployment rate on the self-employment rate (recession push effect) reinforcing the result of resilience too in line with previous findings [41].…”

Resilient Entrepreneurship among European Higher Education Graduates

“…While access to financial resources and social networks act as a plus for older entrepreneurs, personality traits such as ambition and creativity, as well as the high ICT skills clearly work for young entrepreneurs' advantage [23]. Also, the individual perception on the costs and gains related to entrepreneurship in specific economic conditions, perceived as more or less favorable influence the decision for self-employment [28,29]. Other studies pointed out to the impact of first negative experience in relation to the labor market, as periods of unemployment affect youth feelings of security and their long term entrepreneurial or career plans [24,[30][31][32].…”

From hot to cold: A spatial analysis of self‐employment in the United States

“…Focusing on the national context, some studies examine the macroeconomic factors that influence self‐employment rates. These include (i) the evolution of GDP (Bjørnskov & Foss, 2008; Carmona, Congregado, Golpe, & Iglesias, 2016; Klapper, Amit, Guillén, & Quesada, 2007), (ii) unemployment levels (Meager, 1992; Parker & Robson, 2004; Reynolds, Miller, & Maki, 1995), (iii) skills at the aggregate level, such as the level of education in a country (Thai & Turkina, 2014), (iv) the institutional framework (Chemin, 2009), (v) topics related to legal regulation, and (vi) the administrative environment (Porter & Stern, 2001), among others. These factors as a whole can be defined as the national self‐employment context, as they are vital elements in the business activity of a national economy.…”