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Unemployment reduction through solo self-employment: A gender question?

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Abstract

This paper examines at the macro-level whether changes in solo self-employment rates lead to changes in unemployment rates with a special emphasis on the role of the gender of the solo self-employed. This gender-specific perspective on self-employment is important because gender differences are reflected in the individual motivation to become self-employed, the self-selection into differently productive sectors and in the performance of the businesses founded. To empirically approach the research question, macro-level panel data from 23 OECD countries during the period 1991–2015 are used. Since the relationship between solo self-employment and unemployment is likely reciprocal and dynamic, population-weighted vector autoregressive models are estimated and Granger-causality tests are performed. The econometric results indicate that solo self-employment can create positive (indirect) employment effects in the medium to long term, regardless of gender. However, male solo self-employment affects employment growth somewhat faster than does female solo self-employment.

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Fig. 1

Source: World Bank (2017)

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Notes

  1. Among those founded businesses with employees, female leaders were found to have a more centralized, control-oriented leadership style, while men's leadership is more commitment-oriented (Verheul 2018).

  2. Unfortunately data are only available since 1991.

  3. For example, the female self-employment rate is the number of self-employed females expressed as a percentage of the female labor force (World Bank 2017).

  4. We use 8-year changes based on our regression results in Sect. 5. Descriptive statistics for other time intervals can be obtained from the authors upon request.

  5. In the regressions of Table 3, we use total unemployment rates, i.e., not separated by gender. In a robustness test, however, we also differentiate the unemployment rates by male and female. The results are robust against these specification changes and can be obtained from the authors upon request.

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Acknowledgements

The authors thank two anonymous referees and the editor for many helpful comments and suggestions.

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  1. University of Jena, Carl-Zeiss-Str. 3, 07743, Jena, Germany

    Tina Haussen

  2. University of Erfurt, Nordhäuser Str. 74, Building 39, 99089, Erfurt, Germany

    Marcus Schlegel

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Correspondence to Tina Haussen.

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Haussen, T., Schlegel, M. Unemployment reduction through solo self-employment: A gender question?. Empir Econ 59, 3085–3105 (2020). https://doi.org/10.1007/s00181-019-01754-w

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