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Self-employment and the Okun's lawYear:
2019
Author/s: Porras, Sylvina, Martín-Román, Ángel L
Areas: Macroeconomics and Commerce
Editorial: Economic Modelling, Volume 77
Nº of Pages: 253-265
This
research establishes a significant relationship between the share of
self-employment in total employment and the Okun's coefficient, which had been
insufficiently addressed in the literature. We provide evidence on the
determinants driving the differences in the unemployment–output relationship in
Spanish regions and conclude that the differences in the share of
self-employment in total employment prove relevant when accounting for
differences in Okun's law, and its effect is greater than that of labour
productivity per worker, which had been considered the main factor for regional
discrepancies. The economic policy implications of this outcome are valuable
for two reasons: European authorities are promoting self-employment and the
emergence of the ‘gig economy’. This finding also opens a notable line of
research: assessing whether this empirical regularity is observable in other
economies.
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