Does Self-Employment Reduce Unemployment?

André van Stel, Roy Thurik, David Audretsch () and Martin Carree

No N200504, Scales Research Reports from EIM Business and Policy Research

Abstract: This paper investigates the dynamic interrelationship between self-employment and unemployment rates. On the one hand, unemployment rates may stimulate start-up activity of self-employed. On the other hand, higher rates of self-employment may indicate increased entrepreneurial activity reducing unemployment in subsequent periods. These two effects have resulted in considerable ambiguities about the interrelationship between unemployment and entrepreneurial activity. This paper introduces a two-equation vector autoregression model capable of reconciling these ambiguities and tests it for data of 23 OECD countries over the period 1974-2002. The empirical results confirm the two distinct relationships between unemployment and self-employment, i.e. 'refugee' and 'entrepreneurial' effects. We also find that the 'entrepreneurial' effects are considerably stronger than the 'refugee' effects. An updated version of this paper has been published in the Journal of Business Venturing in 2008 (Volume 23, Issue 6, pp. 673-686).

Pages: 16 pages
Date: 2005-04-21
References: Add references at CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
http://www.entrepreneurship-sme.eu/pdf-ez/N200504.pdf (application/pdf)

Related works:
Journal Article: Does self-employment reduce unemployment? (2008)
Working Paper: Does Self-Employment Reduce Unemployment? (2007)
Working Paper: Does Self-Employment reduce Unemployment? (2007)
Working Paper: Does Self-Employment Reduce Unemployment? (2006)
Working Paper: Does Self-Employment Reduce Unemployment? (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eim:papers:n200504

Access Statistics for this paper

More papers in Scales Research Reports from EIM Business and Policy Research Contact information at EDIRC.
Bibliographic data for series maintained by Webmaster EIM ( this e-mail address is bad, please contact ).