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Max-Planck-Institut für Ökonomik, Jena >
Discussion Papers on Entrepreneurship, Growth and Public Policy, MPI für Ökonomik >
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http://hdl.handle.net/10419/19998
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| Title: | | Does self-employment reduce unemployment?  |
| Authors: | | Audretsch, David B. Carree, Martin A. van Stel, André J. Thurik, A. Roy |
| Issue Date: | | 2005 |
| Series/Report no.: | | Papers on entrepreneurship, growth and public policy 0705 |
| 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 unemploy-ment and self-employment, i.e. "refugee" and "entrepreneurial" effects. We also find that the "entrepreneu-rial" effects are considerably stronger than the "refugee" effects. |
| Subjects: | | entrepreneurship Gibrat's Law self-employment unemployment |
| JEL: | | M13 L11 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Discussion Papers on Entrepreneurship, Growth and Public Policy, MPI für Ökonomik
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