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

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Author Info
Martin A. Carree

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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'hypothèse qui affirme que la création d'entreprise s'explique plutôt par les chômeurs que par les actifs occupés afin de permettre àces gens-làde contourner le chômage, ont réalisé des réultats contradictoires. Cela s'explique du moins en partie par le fait que des études n'ont pas considéré la structure industrielle des régions et n'ont pas incorporédes variables suffisantes pour représenter les possibilités offertes par le marché. A partir des données auprès des établissments dans le commerce et les services dont les barrières à l'entrée sont très basses, il s'avère presque pas de preuves à l'appui de cet hypothèse. Les régions aux Etats-Unis dont le taux de chômage est relativement élevéne montrent pas d'augmentations ultérieures relativement fortes du nombre d'établissements àtravers des industries diverses. A quelques exceptions près, àsavoir les vendeurs d'objets d'occasion et les ateliers de réparation 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 erwerbstätig sind, haben widersprüchliche Ergebnisse gezeitigt. Die ist zumindest teilweise Studien zuzuschreiben, welche die industrielle Organisation von Regionen vernachlässigen und versäumen, angemessene Variable zur Darstellung von Marktchancen einzuschließen. Der Autor benutzt Daten amerikanischer Unternehmen des Einzelhandels und der Dienstleistungindustrie mit mäßigen Einstiegsanforderungen, findet jedoch wenig oder keine Beweise für die Hypothese, daß Erwerbslosigkeit einen Anstoß darstellt. Regionen der USA mit verhältnismäßig hohen Erwerbsloigkeitsraten zeigen bei breiter Palette von Industrien später durchweg keine unverhältnismäßig starke Zunahme der Anzahl von Betriebsneugründungen auf. Gebrauchtwarenläden und Werkstätten für Kraftfahrzeugreparaturen stellen mögliche Ausnahmen dar.

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

Volume (Year): 36 (2002)
Issue (Month): 4 (June)
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 listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. 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.
  2. Carree, M. A. & Thurik, A. R., 1999. "The carrying capacity and entry and exit flows in retailing," International Journal of Industrial Organization, Elsevier, vol. 17(7), pages 985-1007, October. [Downloadable!] (restricted)
  3. David Audretsch & Michael Fritsch, 1994. "The Geography of Firm Births in Germany," Regional Studies, Taylor and Francis Journals, vol. 28(4), pages 359-365, July. [Downloadable!] (restricted)
  4. 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.
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  5. 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.
  6. Paul Reynolds & David Storey & Paul Westhead, 1994. "Cross-national Comparisons of the Variation in New Firm Formation Rates: An Editorial Overview," Regional Studies, Taylor and Francis Journals, vol. 28(4), pages 343-346, July. [Downloadable!] (restricted)
  7. 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. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  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. [Downloadable!]
  2. Audretsch, David B & Carree, Martin A & Thurik, A R Roy & van Stel, A J, 2005. "Does Self-Employment Reduce Unemployment?," CEPR Discussion Papers 5057, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Nyström, Kristina, 2008. "The Institutions of Economic Freedom and Entrepreneurship: Evidence from Panel Data," Ratio Working Papers 114, The Ratio Institute.
    Other versions:
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