Self-Employment and Business Cycles

25 Pages Posted: 23 Feb 2010

See all articles by Mónica Carmona

Mónica Carmona

University of Huelva

Antonio Golpe

Universidad de Huelva

Emilio Congregado

University of Huelva

Date Written: February 22, 2010

Abstract

The relationship between self-employment and some macroeconomic variables is and has been at the heart of the debate about self-employment contributions to employment and economic growth. This paper is devoted to the exploration of the co-movement and causality between entrepreneurship and economic performance in both directions. It looks for basic relationships between self-employment and some macroeconomic variables in Spain and the US, using quarterly data from 1987:2 to 2004:4. Our results do not support the procyclicality of self-employment in general, but we found strong evidence on procyclicality for a specific group of self-employed: self-employed with employees (employers) in Spain. On the other hand causality tests suggest that the business cycle (GDP or unemployment) causes to employers and provides evidence on instantaneous causality between self-employment/own-account workers and GDP, in Spain. For the US we found weak correlations between self-employment and the business cycle (they tend to become larger when the forecast horizon increases).

Keywords: Self-employment, Entrepreneurship, Spain, US, Time Series models, Business cycles

JEL Classification: L26, E32, M13, C32

Suggested Citation

Carmona, Mónica and Golpe, Antonio and Congregado, Emilio, Self-Employment and Business Cycles (February 22, 2010). Available at SSRN: https://ssrn.com/abstract=1557304 or http://dx.doi.org/10.2139/ssrn.1557304

Mónica Carmona (Contact Author)

University of Huelva ( email )

Huelva
Spain

Antonio Golpe

Universidad de Huelva ( email )

Huelva
Spain
+34959217828 (Phone)
+34959217828 (Fax)

Emilio Congregado

University of Huelva ( email )

Departament of Economics
Plaza de la Merced, 11
Huelva, Huelva 21002
Spain

HOME PAGE: http://www.uhu.es/emilio.congregado

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