Do Self‐employment Rates Converge? Evidence from European OECD Countries

Abstract

This article uses panel data methods for stationary and non‐stationary data to examine whether self‐employment rates converge for 21 OECD European countries from 1990 to 2011 (the period covered by the COMPENDIA database). This article shows that there is a process of conditional convergence of self‐employment rates particularly within Southern, Northern and Western Europe. These regional groups were characterized by a decreasing trend in their average self‐employment rates. However in Central Europe we find more mixed results across the tests used and observe a rising trend in the average self‐employment rates. Finally, we find some weak evidence of convergence among all European countries.

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

“…Critical values can be found in Ng and Perron (2001, In general, we find mixed evidence of convergence. These results are in line with those of Saridakis et al (2019), although they do not differentiate by gender; these authors find that selfemployment presents structural differences in the single European labour market. Thus, in the next subsection we aim to find clusters of convergence in order to find similarities between our target countries.…”

“…Notwithstanding the size of the literature, there have been, however, few attempts to analyse the behavior of self-employment rate difference between male and female entrepreneurs and whether they converge both at country and at European levels. Our paper relates to Dawson et al (2014) and Saridakis et al (2019), which are articles that tackle each of those problems (see also Monfort el al., 2013).…”

“…We seek to contribute to the literature by filling the gap on studies that compare the behavior of self-employment in different countries (in particular those one belonging to economic areas, Saridakis et al, 2019) by focusing the attention on gender differences. Thus, in this paper we analyse convergence among self-employment rates between male and female by means of unit root tests and fractional integration.…”

“…Several countries have the opportunity of narrowing the gap between male and female self-employment; those countries exhibiting a similar behavior should take advantage of their potential synergies. Eventually, as pointed out bySaridakis et al (2019), fostering self-employment should foster economic growth (particularly in low-growth regions or during recessions), as it is becoming a major driver for the development of the economies and their innovative processes 8 . Although not directly tested and assessed, we can say that the evidence in favor of convergence may highlight that EU wide policies to enhance entrepreneurship may have worked, by means of homogenizing the way entrepreneurs behave.…”

Self-employment convergence in Europe: The role of migration

“…In this context, the analysis of convergence in SE patterns may provide evidence that can contribute to a better design of public policies. However, this literature is still scarce [12] find evidence of weak convergence across Europe, although conditional convergence is observed in both Southern and Northern Europe. Countries in Southern Europe share several social and institutional characteristics and economic structures, as do countries in Northern Europe.…”