The Relationship between Self-employment and Unemployment in the Long-Run: A Panel Cointegration Approach Allowing For Breaks

Saridakis, G., Mendoza, M.A., Muñoz Torres, R.I. and Glover, J. 2016. The Relationship between Self-employment and Unemployment in the Long-Run: A Panel Cointegration Approach Allowing For Breaks . Journal of Economic Studies. 43 (3), pp. 358-379. doi:10.1108/JES-11-2013-0169

TitleThe Relationship between Self-employment and Unemployment in the Long-Run: A Panel Cointegration Approach Allowing For Breaks
TypeJournal article
AuthorsSaridakis, G., Mendoza, M.A., Muñoz Torres, R.I. and Glover, J.
Abstract

Although a lot of research has been done on the link between self-employment and unemployment, often focusing on the short-run of the relationship, the long-run association between the two variables has not received adequate attention. In this paper we examine the long-run relationship between self-employment and unemployment using panel cointegration methods allowing for structural breaks and covering a wide range of European OECD countries using the COMPENDIA dataset over the period 1990-2011. Our findings indicate that a long-run relationship between self-employment and unemployment exist in the panel, but the cointegrating coefficients are unstable. Our estimates finds that positive and statistically significant long-run association between self-employment and unemployment exists for more than 50% of the countries included in the sample after the break. For the rest of the countries we find either negative or statistically insignificant association.

Keywordsself-employment, unemployment, Europe, panel cointegration, long-run, structural breaks
JournalJournal of Economic Studies
Journal citation43 (3), pp. 358-379
ISSN0144-3585
Year2016
PublisherEmerald
Digital Object Identifier (DOI)doi:10.1108/JES-11-2013-0169
Publication dates
Published03 Aug 2016

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