Self-employment and unemployment relationship in Romania - Insights by age, education and gender

• Published in: Economic research - Ekonomska istraživanja Vol. 33; no. 1; pp. 2462 - 2487
• Main Authors: Grigorescu, Adriana, Pîrciog, Speranta, Lincaru, Cristina
• Format: Journal Article Paper
• Language: English
• Published: Pula Routledge 01.01.2020; Taylor & Francis Ltd; Taylor and Francis Group i Sveučilište Jurja Dobrile u Puli, Fakultet ekonomije i turizma Dr. Mijo Mirković
• Subjects: Causality; Economic theory; employee's rate; Employees; entrepreneurship; Flexibility; Gender; High risk; Higher education; Job creation; Labor market; labour market effects; Males; Older people; Risk; Self employment; sustainability; Unemployment; Romania
• ISSN: 1331-677X; 1848-9664
• DOI: 10.1080/1331677X.2019.1689837

We check on the short term if self-employment in Romania influences unemployment and vice versa. Age, education and gender characteristics treat both variables, and self-employment considers both cases with and without employees. The objective is to look at the job creation and unemployment reduction in quarterly variation during the 1999Q1-2017Q3 period. On autoregressive models, we apply the Toda and Yamamoto (1995) procedure, detailed by Giles ( 2011 ), to assess for Granger Causality. We found for unemployment rates a push effect in the self-employment rate for adults and youth with low education level to self-employment without employees' rate for adults and self-employment with employees' rate for old adults. We establish a 'Schumpeter' effect for the adult with a low level of education self-employment to unemployment, for adults' males with tertiary education and self-employed, and older adults self-employed without employees to unemployment. We conclude that unemployment work as an inclusion mechanism for some vulnerable groups but inefficient for others. Self-employment with employees is less diversified, indicating a high-risk aversion and low start-up effect. In general, the labour market presents a unidirectional flexibility effect.