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Self-employment by gender in the EU: convergence and clusters

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Abstract

This paper studies the convergence of self-employment by gender in the European Union, through tests for the order of integration and cluster analysis, in order to investigate the occurrence of two types of convergence: between genders and among European countries. The paper makes two contributions to the literature: (1) theoretically, it provides useful insights into the macroeconomic determinants of self-employment; (2) methodologically, it uses unit roots, fractional integration and cluster analysis to assess convergence. The empirical results point at mixed evidence of convergence, but with clear differences between the core and the periphery of Europe.

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Notes

  1. Fritsch et al. (2015) show that Germany experienced a unique rise in the level of self-employment in the first two decades following unification. The factors driving the overall level of self-employment are demographic developments, the shift towards service sector employment, and a larger share of population holding a tertiary degree.

  2. Acs (2006) and Thurik, (2009) claim a link between economic growth and entrepreneurship but definitely not specifically for self-employment.

  3. Technology can be imitative or research-based as emphasized by Minniti and Lévesque (2010). The type of entrepreneur [imitator or creator] is more important depending on the type of country (Goel and Ram 1994, and Gong and Keller 2003). Rich countries would have more creators, while entrepreneurs in poor countries would more likely be imitators.

  4. Henrekson and Sanandaji (2014) conclude that small business activity does not measure entrepreneurship, and the rate of billionaire entrepreneurship (considered to have high-impact/ to be of Schumpeterian type) negatively correlates (cross-county) with SE.

  5. See Gil-Alana and Robinson (1997) for the specific functional form of the testing approach employed here.

  6. Eurostat defines a self-employed person as “the sole or joint owner of the unincorporated enterprise (one that has not been incorporated i.e. formed into a legal corporation) in which he/she works, unless they are also in paid employment which is their main activity (in that case, they are considered to be employees)” (retrieved from https://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Self-employed on 22/06/2020).

  7. Performing other standard unit root methods like Dickey and Fuller (ADF, 1979) and Phillips and Perron (PP, 1988) we obtain similar evidence in favor of nonstationarity I(1) in the majority of the cases.

  8. In the EU, the promotion of self-employment is reflected in the Europe 2020 Strategy.

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Acknowledgements

Juan Carlos Cuestas acknowledges the financial support from the MINEIC-AEI-FEDER ECO2017-85503-R and ECO2017-83255-C3-3-P projects both of them from ‘Ministerio de Economía, Industria y Competitividad’ (MINEIC), `Agencia Estatal de Investigación' (AEI) Spain and `Fondo Europeo de Desarrollo Regional' (FEDER), and the UJI project UJI-B2019-15. The first of these projects is also acknowledged by Luis A. Gil-Alana.

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Authors and Affiliations

  1. Department of Economics, Florida Atlantic University, Boca Raton, USA

    João Ricardo Faria

  2. Department of Economics and IEI, Jaume I University, Castelló de la Plana, Spain

    Juan Carlos Cuestas

  3. Department of Economics and Finance, Tallinn University of Technology, Tallinn, Estonia

    Juan Carlos Cuestas

  4. Research Unit, Eesti Pank, Tallinn, Estonia

    Juan Carlos Cuestas

  5. Department of Economics, University of Navarra, Pamplona, Spain

    Luis Gil-Alana

  6. Department of Economics, University of A Coruna, A Coruna, Spain

    Estefania Mourelle

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  1. João Ricardo Faria
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  4. Estefania Mourelle
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Correspondence to Luis Gil-Alana.

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Appendix

Appendix

See Tables 8, 9 and 10.

Table 8 Report for Fig. 4
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Table 9 Report for Fig. 5
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Table 10 Report for Fig. 6
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Faria, J.R., Cuestas, J.C., Gil-Alana, L. et al. Self-employment by gender in the EU: convergence and clusters. Empirica 48, 717–741 (2021). https://doi.org/10.1007/s10663-020-09494-2

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