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Does Unemployment Affect the Number of Establishments? A Regional Analysis for US States

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  • Martin Carree

Abstract

Empirical tests of the 'unemployment push' hypothesis that unemployed workers start up new enterprises to a greater extent than employed workers to escape unemployment have produced contradictory results. This is at least partially a consequence of studies neglecting the industrial organization of regions and not incorporating adequate variables to represent market opportunities. Using data of US establishments in retail and service industries with low entry barriers, we find little or no evidence for the 'unemployment push' hypothesis. US regions with relatively high unemployment rates do not show relatively strong subsequent increases in the number of establishments across a broad range of industries. Possible exceptions are used merchandise stores and automotive repair shops. Des tests empiriques de l'hypothese qui affirme que la creation d'entreprise s'explique plutot par les chomeurs que par les actifs occupes afin de permettre aces gens-lade contourner le chomage, ont realise des reultats contradictoires. Cela s'explique du moins en partie par le fait que des etudes n'ont pas considere la structure industrielle des regions et n'ont pas incorporedes variables suffisantes pour representer les possibilites offertes par le marche. A partir des donnees aupres des etablissments dans le commerce et les services dont les barrieres a l'entree sont tres basses, il s'avere presque pas de preuves a l'appui de cet hypothese. Les regions aux Etats-Unis dont le taux de chomage est relativement elevene montrent pas d'augmentations ulterieures relativement fortes du nombre d'etablissements atravers des industries diverses. A quelques exceptions pres, asavoir les vendeurs d'objets d'occasion et les ateliers de reparation automobile. Empirische Untersuchungen der Hypothese des Anstosses, den Erwerbslosigkeit gibt, neue Unternehmen aufzuziehen, indem sie eher erwerbslose, Verdienst suchende Arbeiter dazu veranlasst, als solche, die erwerbstatig sind, haben widerspruchliche Ergebnisse gezeitigt. Die ist zumindest teilweise Studien zuzuschreiben, welche die industrielle Organisation von Regionen vernachlassigen und versaumen, angemessene Variable zur Darstellung von Marktchancen einzuschliessen. Der Autor benutzt Daten amerikanischer Unternehmen des Einzelhandels und der Dienstleistungindustrie mit massigen Einstiegsanforderungen, findet jedoch wenig oder keine Beweise fur die Hypothese, dass Erwerbslosigkeit einen Anstoss darstellt. Regionen der USA mit verhaltnismassig hohen Erwerbsloigkeitsraten zeigen bei breiter Palette von Industrien spater durchweg keine unverhaltnismassig starke Zunahme der Anzahl von Betriebsneugrundungen auf. Gebrauchtwarenladen und Werkstatten fur Kraftfahrzeugreparaturen stellen mogliche Ausnahmen dar.

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Bibliographic Info

Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 36 (2002)
Issue (Month): 4 ()
Pages: 389-398

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Handle: RePEc:taf:regstd:v:36:y:2002:i:4:p:389-398

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Related research

Keywords: Consumer Services Net; Entry Retailing; Unemployment;

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References

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  1. Carree, M.A. & Thurik, A.R., 1999. "The carrying capacity and entry and exit flows in retailing," Open Access publications from Maastricht University urn:nbn:nl:ui:27-3947, Maastricht University.
  2. Audretsch, David & Jin, Jim, 1994. " A Reconciliation of the Unemployment--New Firm Startup Paradox," Small Business Economics, Springer, vol. 6(5), pages 381-85, October.
  3. Carree, Martin & Thurik, Roy, 1994. " The Dynamics of Entry, Exit and Profitability: An Error Correction Approach for the Retail Industry," Small Business Economics, Springer, vol. 6(2), pages 107-16, April.
  4. Foti, Alessandro & Vivarelli, Marco, 1994. " An Econometric Test of the Self-Employment Model: The Case of Italy," Small Business Economics, Springer, vol. 6(2), pages 81-93, April.
  5. David Audretsch & Michael Fritsch, 1999. "The Industry Component of Regional New Firm Formation Processes," Review of Industrial Organization, Springer, vol. 15(3), pages 239-252, November.
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Cited by:
  1. D.B. Audretsch & M.A. Carree & A.R. Thurik, 2001. "Does Entrepreneurship reduce Unemployment?," Tinbergen Institute Discussion Papers 01-074/3, Tinbergen Institute, revised 24 Oct 2008.
  2. Kristina Nyström, 2008. "The institutions of economic freedom and entrepreneurship: evidence from panel data," Public Choice, Springer, vol. 136(3), pages 269-282, September.
  3. A. Roy Thurik & Martin A. Carree & Andre van Stel & David B. Audretsch, 2007. "Does Self-Employment reduce Unemployment?," Jena Economic Research Papers 2007-089, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  4. Marie-Estelle Binet & François Facchini, 2013. "Determinants of Entrepreneurship in French Regions: The Role of Spatial Heterogeneity," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201312, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  5. Carree, Martin A., 2006. "On factors promoting and hindering entry and exit," Open Access publications from Maastricht University urn:nbn:nl:ui:27-15504, Maastricht University.
  6. Verheul, I. & Carree, M.A. & Santarelli, E., 2007. "Regional Opportunities and Policy Initiatives for New Venture Creation," Research Paper ERS-2007-092-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
  7. Marcus Dejardin & Martin Carree, 2011. "Firm Entry and Exit in Local Markets: Market Pull and Unemployment Push," Working Papers 1114, University of Namur, Department of Economics.

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