Article ; Online: Self-employment over the business cycle in the USA: a decomposition.
2020 Volume 57, Issue 4, Page(s) 1837–1855
Abstract: Entry rates into self-employment increase during recessions and decrease during economic upswings. I show that this is mostly explained by the higher unemployment rate during a recession, together with the fact that at all times, unemployed persons have ... ...
Abstract | Entry rates into self-employment increase during recessions and decrease during economic upswings. I show that this is mostly explained by the higher unemployment rate during a recession, together with the fact that at all times, unemployed persons have a relatively high propensity to become self-employed out of necessity. I use econometric decomposition techniques to quantify these effects based on the monthly matched US Current Population Survey before, during, and after the Great Recession. I also document that the entry rate into self-employment with unincorporated businesses strongly increased during the recession, but not into self-employment with incorporated businesses. This highlights the association of unincorporated and incorporated self-employment with necessity and opportunity entrepreneurship, respectively. The results are useful for policymakers and practitioners to understand, forecast and act on the different types of self-employment that can be expected over the business cycle. There are also important implications for theories of the cyclicality of unemployment and entrepreneurship. |
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Language | English |
Publishing date | 2020-07-29 |
Publishing country | United States |
Document type | Journal Article |
ZDB-ID | 1478919-X |
ISSN | 1573-0913 ; 0921-898X |
ISSN (online) | 1573-0913 |
ISSN | 0921-898X |
DOI | 10.1007/s11187-020-00375-3 |
Database | MEDical Literature Analysis and Retrieval System OnLINE |
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