The relationship between self-employment and unemployment in the long-run

Abstract

Although a lot of research has been done on the link between selfemployment and unemployment, often focusing on the short-run of the relationship, the long-run association between the two variables has not received adequate attention. In this paper we examine the long-run relationship between self-employment and unemployment using panel cointegration methods allowing for structural breaks and covering a wide range of European OECD countries using the COMPENDIA dataset over the period 1990-2011. Our findings indicate that a long-run relationship between self-employment and unemployment exist in the panel, but the cointegrating coefficients are unstable. Our estimates finds positive and statistically significant long-run association between self-employment and unemployment exists for more than 50% of the countries included in the sample after the break. For the rest of the countries we find either negative or statistically insignificant association.

Societal determinants of violent death: The extent to which social, economic, and structural characteristics explain differences in violence across Australia, Canada, and the United States

“…Other studies on self-employment have suggested that social isolation, a well-documented risk factor for suicide (Arango et al, 2016), is a substantial concern among those who are self-employed (Feldman & Bolino, 2000; Grant & Ferris, 2012). Some research also suggests that self-employment may be a marker of economic isolation in communities, in that poor economic conditions and unemployment may “push” individuals into self-employment as an alternative particularly if they experience other social risk factors such as low educational attainment (Earle & Sakova, 2000; Saridakis et al, 2016; Svaleryd, 2015), although other studies have shown mixed findings on this link (Henley, 2017). Other factors directly or indirectly linked to both self-employment and suicide such as stress, risk for financial loss, rural region, and access to lethal means may also potentially contribute to this association (Benach et al, 2004; Dolinsky & Caputo, 2003; Jamal, 2007; Stallones, Doenges, Dik, & Valley, 2013).…”

“…Self-employment was measured as the percentage of workers that were self-employed. Self-employment has been linked to health and quality of life concerns such as stress, fatigue, and negative behavioral, psychological, and physical health outcomes (Benach, Gimeno, Benavides, Martinez, & del Mar Torné, 2004; Dolinsky & Caputo, 2003) as well as other social and economic characteristics that could potentially be linked to violence outcomes (Earle & Sakova, 2000; Saridakis, Mendoza, Muñoz Torres, & Glover, 2016; Svaleryd, 2015).…”

The unemployment-entrepreneurship nexus: new evidence from 30 Iranian provinces

“…In this context, along with political analysis, many studies have tried to explore the counter- or pro-cyclical relationship between unemployment and entrepreneurship with a focus on developed and industrialised economies, rather than developing economies. However, the previous studies produced mixed and inconclusive results (Saridakis et al (2016). The unemployment-entrepreneurship nexus has important implications for governments in several crucial aspects.…”

The Links between Unemployment and Self-Employment: Evidence from the EU Countries

“…In other words, as different countries can be undergoing different periods of an economic (labor market) cycle, they may show different results of the interdependence between unemployment and self-employment. For instance, by employing panel cointegration methods, [9] investigated the COMPENDIA dataset, developed for a wide range of European OECD countries over the period 1990-2011. The results of their study disclosed a positive and statistically significant long-term relation between unemployment and self-employment which was observed in more than half of the countries under consideration.…”

“…Previous studies that focused on the dynamic relationship between unemployment and self-employment in different countries provide rather contradictory results: depending on the recession push or entrepreneurial pull approach followed, some authors [6][7][8][9] found a positive and statistically significant relationship between the two phenomena under research, while others reported about a negative [10][11][12] insignificant [13] relationship or the existence of the relationship was not confirmed, especially as far as it concerns particular countries [14].…”