Employment protection and regional self-employment rates in an economic downturn: a multilevel analysis

Nikolaos Filippopoulos () and Georgios Fotopoulos
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Nikolaos Filippopoulos: University of Peloponnese

The Annals of Regional Science, 2024, vol. 72, issue 2, No 14, 617-646

Abstract: Abstract This research aims to investigate the role of employment protection in affecting the relationship between regional self-employment and unemployment during turbulent times. In doing so, data comprised of 230 regions, nested in 17 EU countries, for the 2008–2015 period were used. When accounting for individual effects, we find that an increase in regional unemployment would decrease regional self-employment, while the opposite was found true for employment protection. When accounting for the cross-level interaction between regional unemployment and national employment protection legislation, however, we find that the underlying increased labor market rigidity not only decreases regional self-employment, but it also magnifies the adverse effect of regional unemployment. Our key results thus indicate that high labor market rigidity hinders self-employment.

JEL-codes: C19 K31 L26 R10 R23 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s00168-023-01214-5

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