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

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.