How sensitive is the business ownership rate to unemployment fluctuations? Evidence of asymmetries in a panel of 23 OECD countries
- García Machado, Juan José (coord.)
Publisher: Escuela Superior de Gestión Comercial y Marketing, ESIC
ISBN: 978-84-7356-914-9
Year of publication: 2013
Congress: Asociación Europea de Dirección y Economía de Empresa. Congreso Nacional (27. 2013. Islantilla)
Type: Conference paper
Abstract
The aim of this article is to identify whether the relationship running from unemployment to entrepreneurship/self-employment �the so-called 'recession-push' hypothesis- is affected asymmetrically by the labor market dynamics conditions. To this end we employ a panel threshold regression model, proposed by Hansen (1999), in which nonlinearities are introduced by allowing exogenous variable to have a different impact on the endogenous variable depending on the regime. In particular, our estimates provide support to the existence of different responses of cyclical self-employment to cyclical unemployment, depending on the value of the deviation between the observed and natural rate of unemployment one period lagged �i.e. depending on the intensity of the unemployment problem-, which is the threshold variable.