Job Creation and the Self-employed Firm Size: evidence from Spain
Over the last decade, Spain created more jobs than any other country in Europe; however, now it is destroying them at an equal pace. Nevertheless, the relationship between the level of employment and the level of self-employment has remained relatively stable. In this context, there is a considerable policy interest in the way in which the self-employed firm in Spain creates and destroys employment, i.e., in the role of the self-employed as creators of additional job opportunities. This paper provides evidence of the existence of a long-term relationship between the self-employed firm that hires external labor and employees hired by third parties in Spain, while accounting for the existence of an abrupt shift in the size of self-employed firms during the previous crisis (1991 to 1993). These findings are qualified testing whether this relationship is time-dependent. Our results suggest that the null hypothesis of linear cointegration would be rejected in favor of a two-regime threshold cointegration model, that is, in favor of a time-sensitive relationship with two opposite regimes. These two regimes differ in the way that the two components of the self-employed firm size respond to restore equilibrium. In this paper, alternative rationales for explaining these findings are also discussed.
|Date of creation:||Feb 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Edifici Departamental Oriental, Campus dels Tarongers, Avda. dels Tarongers, S/N (4P15), 46022 - València|
Phone: 963 82 83 49
Fax: 963 82 83 54
Web page: http://www.estructuraeconomica.es
More information through EDIRC
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.:
- Pfeiffer, Friedhelm & Reize, Frank, 1998.
"Business Start-ups by the Unemployed - an Econometric Analysis Based on Firm Data,"
ZEW Discussion Papers
98-38, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Pfeiffer, Friedhelm & Reize, Frank, 2000. "Business start-ups by the unemployed -- an econometric analysis based on firm data," Labour Economics, Elsevier, vol. 7(5), pages 629-663, September.
- Andrea Borgarello & Pietro Garibaldi & Lia Pacelli, 2003.
"Employment Protection Legislation and the Size of Firms,"
LABORatorio R. Revelli Working Papers Series
23, LABORatorio R. Revelli, Centre for Employment Studies.
- Pietro Garibaldi & Lia Pacelli & Andrea Borgarello, 2004. "Employment Protection Legislation and the Size of Firms," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 63(1), pages 33-68, April.
- Pietro Garibaldi & Lia Pacelli & Andrea Borgarello, 2003. "Employment Protection Legislation and the Size of Firms," Working Papers 247, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Garibaldi, Pietro & Pacelli, Lia & Borgarello, Andrea, 2003. "Employment Protection Legislation and the Size of Firms," IZA Discussion Papers 787, Institute for the Study of Labor (IZA).
- André Stel & David Storey & A. Thurik, 2007.
"The Effect of Business Regulations on Nascent and Young Business Entrepreneurship,"
Small Business Economics,
Springer, vol. 28(2), pages 171-186, March.
- André van Stel & Roy Thurik & David Storey, 2006. "The effect of business regulations on nascent and young business entrepreneurship," Scales Research Reports H200609, EIM Business and Policy Research.
- van Stel, A.J. & Storey, D. & Thurik, A.R., 2006. "The Effect of Business Regulations on Nascent and Young Business Entrepreneurship," ERIM Report Series Research in Management ERS-2006-052-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 University Rotterdam.
- Enrico Santarelli, 2002.
"Is subsidizing entry an optimal policy?,"
Industrial and Corporate Change,
Oxford University Press, vol. 11(1), pages 39-52, February.
- PERRON, Pierre & RODRIGUEZ, Gabriel, 1998.
"GLS Detrending, Efficient Unit Root Tests and Structural Change,"
Cahiers de recherche
9809, Universite de Montreal, Departement de sciences economiques.
- Perron, Pierre & Rodriguez, Gabriel, 2003. "GLS detrending, efficient unit root tests and structural change," Journal of Econometrics, Elsevier, vol. 115(1), pages 1-27, July.
- Krishna B. Kumar & Raghuram G. Rajan & Luigi Zingales, 1999.
"What Determines Firm Size?,"
NBER Working Papers
7208, National Bureau of Economic Research, Inc.
- Kumar, Krishna B & Rajan, Raghuram G & Zingales, Luigi, 1999. "What Determines Firm Size?," CEPR Discussion Papers 2211, C.E.P.R. Discussion Papers.
- Krishna B. Kumar & Raghuram G. Rajan & Luigi Zingales, . "What Determines Firm Size?," CRSP working papers 496, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Perron, Pierre, 1997.
"Further evidence on breaking trend functions in macroeconomic variables,"
Journal of Econometrics,
Elsevier, vol. 80(2), pages 355-385, October.
- Perron, P., 1994. "Further Evidence on Breaking Trend Functions in Macroeconomic Variables," Cahiers de recherche 9421, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Perron, P., 1994. "Further Evidence on Breaking Trend Functions in Macroeconomic Variables," Cahiers de recherche 9421, Universite de Montreal, Departement de sciences economiques.
- Perron, P., 1990. "Further Evidence On Breaking Trend Functions In Macroeconomics Variables," Papers 350, Princeton, Department of Economics - Econometric Research Program.
- Giulia Faggio & Stephen Nickell, 2007.
"Patterns of Work Across the OECD,"
Royal Economic Society, vol. 117(521), pages 416-440, 06.
- Giulia Faggio & Stephen Nickell, 2006. "Patterns of work across the OECD," LSE Research Online Documents on Economics 19853, London School of Economics and Political Science, LSE Library.
- Giulia Faggio & Stephen Nickell, 2006. "Patterns of Work Across the OECD," CEP Discussion Papers dp0730, Centre for Economic Performance, LSE.
- Torrini, Roberto, 2005.
"Cross-country differences in self-employment rates: the role of institutions,"
Elsevier, vol. 12(5), pages 661-683, October.
- Roberto Torrini, 2002. "Cross-country differences in self-employment rates: the role of institutions," Temi di discussione (Economic working papers) 459, Bank of Italy, Economic Research and International Relations Area.
- Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, 1.
- Bover, O. & Arellano, M. & Bentolila, S., 1997.
"Unemployment Duration, Benefit Duration, and the Business Cycle,"
9717, Centro de Estudios Monetarios Y Financieros-.
- Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
- Arellano, Manuel & Bentolila, Samuel & Bover, Olympia, 1998. "Unemployment Duration, Benefit Duration and the Business Cycle," CEPR Discussion Papers 1840, C.E.P.R. Discussion Papers.
- Hansen, Bruce E. & Seo, Byeongseon, 2002.
"Testing for two-regime threshold cointegration in vector error-correction models,"
Journal of Econometrics,
Elsevier, vol. 110(2), pages 293-318, October.
- Tom Doan, . "RATS programs to replicate Hansen/Seo paper on threshold cointegration," Statistical Software Components RTZ00092, Boston College Department of Economics.
- Nathan S. Balke & Thomas B. Fomby, 1992.
9209, Federal Reserve Bank of Dallas.
- DeJong, David N, et al, 1992. "Integration versus Trend Stationarity in Time Series," Econometrica, Econometric Society, vol. 60(2), pages 423-33, March.
- Congregado, Emilio & Golpe, Antonio A. & Carmona, Mónica, 2010. "Is it a good policy to promote self-employment for job creation? Evidence from Spain," Journal of Policy Modeling, Elsevier, vol. 32(6), pages 828-842, November.
- Rui Baptista & Roy Thurik, 2004. "The Relationship between Entrepreneurship and Unemployment: is Portugal an Outlier?," Papers on Entrepreneurship, Growth and Public Policy 2004-40, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Marc Cowling & Mark Taylor & Peter Mitchell, 2004. "Job Creators," Manchester School, University of Manchester, vol. 72(5), pages 601-617, 09.
- Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992.
"Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?,"
Journal of Econometrics,
Elsevier, vol. 54(1-3), pages 159-178.
- Kwiatkowski, D. & Phillips, P.C.B. & Schmidt, P., 1990. "Testing the Null Hypothesis of Stationarity Against the Alternative of Unit Root : How Sure are we that Economic Time Series have a Unit Root?," Papers 8905, Michigan State - Econometrics and Economic Theory.
- Denis Kwiatkowski & Peter C.B. Phillips & Peter Schmidt, 1991. "Testing the Null Hypothesis of Stationarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?," Cowles Foundation Discussion Papers 979, Cowles Foundation for Research in Economics, Yale University.
- André van Stel & Roy Thurik & Sander Wennekers & Martin Carree, 2010.
"The relationship between entrepreneurship and economic development: is it U-shaped?,"
Scales Research Reports
H200824, EIM Business and Policy Research.
- Wennekers, Sander & van Stel, Andr� & Carree, Martin & Thurik, Roy, 2010. "The Relationship between Entrepreneurship and Economic Development: Is It U-Shaped?," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 6(3), pages 167-237, July.
- Shin, Yongcheol, 1994. "A Residual-Based Test of the Null of Cointegration Against the Alternative of No Cointegration," Econometric Theory, Cambridge University Press, vol. 10(01), pages 91-115, March.
- Concepción Román & Emilio Congregado & José Millán, 2011. "Dependent self-employment as a way to evade employment protection legislation," Small Business Economics, Springer, vol. 37(3), pages 363-392, October.
- Fabiano Schivardi & Roberto Torrini, 2004. "Firm size distribution and employment protection legislation in Italy," Temi di discussione (Economic working papers) 504, Bank of Italy, Economic Research and International Relations Area.
- Pierre Perron & Serena Ng, 1996. "Useful Modifications to some Unit Root Tests with Dependent Errors and their Local Asymptotic Properties," Review of Economic Studies, Oxford University Press, vol. 63(3), pages 435-463.
- Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, 1.
When requesting a correction, please mention this item's handle: RePEc:eec:wpaper:1202. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Silviano Esteve)
If references are entirely missing, you can add them using this form.