Question

is self employment the only way to eradicate unemployment?

Answer 1

Maybe Yes

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Hope it Helps you ♥

Answer 2

Answer:

There is a flourishing literature on the determinants and economic effects of self-employment in

advanced market economies (for a recent summary see, e.g. Parker 2004). Theoretical and

empirical literature has identified various important factors influencing the self-employment

decision, among them labour and goods markets regulation, taxation, individual characteristics,

such as age, education, gender, ethnicity, and previous unemployment experience. In the

economic policy debate, self-employment is typically considered to contribute to labour market

flexibility and higher employment, and to lead to less unemployment.

The focus of this paper is on the impact of previous (long-term) unemployment on the entry

rate into self-employment. Two alternative hypotheses have been suggested to rationalize this

relationship: The so-called “unemployment push” hypothesis states that high unemployment may

reduce the opportunity to gain salaried employment and thus positively affect self-employment.

The “unemployment pull” hypothesis states that high unemployment may negatively affect

individual expectations about the success of self-employment, or reinforce credit constraints.

Whereas the former hypothesis would imply a positive relationship between the entry rate into

self-employment and unemployment, the latter hypotheses would imply a negative relationship.