Edited by Richard J. Cebula, Joshua Hall, Franklin G. Mixon Jr and James E. Payne
Chapter 21: The US entrepreneurship–unemployment nexus
AbstractThis study extends the recent literature on the causal dynamics between entrepreneurship and the unemployment rate in the case of the U.S. Using higher frequency data than previous studies, the results indicate the absence of a long-run (co-integrated) relationship between both aggregated and disaggregated self-employment rates and the unemployment rate. VAR models in first-differences, recognizing the presence of recessionary periods, reveal unidirectional causality from the respective self-employment rates to the unemployment rate. However, the magnitude of the impact of overall self-employment is marginally insignificant with respect to the unemployment rate with the impact different between incorporated and unincorporated self-employment.
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