Does Entrepreneurship Reduce Unemployment?
2001-08-02
Research Paper
| Related Files |
|---|
View PDF Version
(2001-0743.pdf, 0.1MB) |
The relationship between unemployment and entrepreneurship has been shrouded with ambiguity. There is assumed to be a two-way causation between changes in the level of entrepreneurship and that of unemployment-- a "Schumpeter" effect of entrepreneurship reducing unemployment and a "refugee" or "shopkeeper" effect of unemployment stimulating entrepreneurship. The purpose of this paper is to try to reconcile the ambiguities found in the relationship between unemployment and entrepreneurship. We do this by introducing a two equation model where changes in unemployment and in the number of business owners are linked to subsequent changes in those variables for a panel of 23 OECD countries over the period 1974-1998. The existence of two distinct and separate relationships between unemployment and entrepreneurship is identified including significant "Schumpeter" and "refugee" effects.
- O11 : Macroeconomic Analyses of Economic Development
- L11 : Production, Pricing, and Market Structure; Size Distribution of Firms
- M13 : New Firms; Startups
- unemployment
- entrepreneurship
- business
- activity
- growth
- economic
- country
- business economics
- number
- relationship
- increase
- change
- self-employment
- audretsch
- effect
- journal
- employment
- economy
- result
- david
