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Title:Self-employment and unemployment in Spanish regions in the period 1979-2001 PDF Logo
Authors:Golpe, Antonio A.
van Stel, André J.
Issue Date:2007
Series/Report no.:Jena economic research papers 2007,021
Abstract:This paper investigates the relation between changes in self-employment and changes in unemployment at the regional level in Spain in the period 1979-2001. We estimate a vec-tor autoregression model as proposed by Audretsch, Carree, van Stel and Thurik (2005) using a data base for Spanish regions. By estimating the model we are able to empirically distinguish between two directions of causality. On the one hand increases in self-employment may contribute to lower unemployment rates (the ‘entrepreneurial’ effect). On the other hand, higher unemployment rates may push individuals into self-employment, thereby contributing to higher self-employment rates (the ‘refugee’ effect). In our analysis of these two effects we distinguish between higher and lower income regions within Spain. We find empirical support for the ‘entrepreneurial’ effect to exist, both in higher income and in lower income regions. As regards the ‘refugee’ effect, the evidence is mixed. We find empirical support for this effect for higher income regions. Remarkably, we do not find evidence for a ‘refugee’ effect in lower income regions of Spain, even though unemployment rates are on average higher in these regions. We argue that this may be partly related to a lack of incentives for unemployed individuals in these regions to find paid employment.
Subjects:entrepreneurship
self-employment
unemployment, economic growth
Spain
JEL:E24
L11
M13
O10
O52
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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