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|Title:||Does self-employment reduce unemployment? |
|Authors:||Thurik, A. Roy|
Carree, Martin A.
van Stel, André J.
Audretsch, David B.
|Issue Date:||2007 |
|Series/Report no.:||Jena economic research papers 2007,089|
|Abstract:||This paper investigates the dynamic relationship between self-employment and unem-ployment rates. On the one hand, high unemployment rates may lead to start-up activity of self-employed individuals (the refugee effect). On the other hand, higher rates of self-employment may indicate increased entrepreneurial activity reducing unemployment in subsequent periods (the entrepreneurial effect). This paper introduces a new two-equation vector autoregression model capable of reconciling these ambiguities and es-timates it for data from 23 OECD countries between 1974 and 2002. The empirical re-sults confirm the existence of two distinct relationships between unemployment and self-employment: the refugee and entrepreneurial effects. We also find that the entrepre-neurial effects are considerably stronger than the refugee effects.|
|Document Type:||Working Paper|
|Appears in Collections:||Jena Economic Research Papers, MPI für Ökonomik|
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