Self-employment in Denmark and Spain: institution, economic conditions and gender differences

Among the OECD countries, Spain faces one of the highest rates of self-employment and Denmark one of the lowest, being the difference specially relevant among women. These two countries present important differences in their institutional environment and labour market conditions: the level of labour market flexibility and the importance of parttime employment, the generosity of the unemployment benefit systems, and the role of the child care policies, among others. In this paper we compare the Danish and Spanish labour markets and analyze to what extent the different evolution of female and male self-employment rates are influenced by country-specific employment conditions. This study is carried out for men and women separately using a strictly comparable panel data set for the two countries. The results indicate that in Spain self-employment seems to offer individuals who normally are considered as marginalized in the labour market a beneficial alternative to wage employment, while this pattern is not so clear in Denmark. Our analysis suggests that an important factor in explaining the difference in Danish and Spanish self-employment rates is the different employment environment that both countries face

Self-employment in Denmark and Spain: Institution, Economic Conditions and Gender differences

Among the OECD countries, Spain faces one of the highest rates of self-employment and Denmark one of the lowest, being the difference specially relevant among women. These two countries present important differences in their institutional environment and labour market conditions: the level of labour market flexibility and the importance of parttime employment, the generosity of the unemployment benefit systems, and the role of the child care policies, among others. In this paper we compare the Danish and Spanish labour markets and analyze to what extent the different evolution of female and male self-employment rates are influenced by country-specific employment conditions. This study is carried out for men and women separately using a strictly comparable panel data set for the two countries. The results indicate that in Spain self-employment seems to offer individuals who normally are considered as marginalized in the labour market a beneficial alternative to wage employment, while this pattern is not so clear in Denmark. Our analysis suggests that an important factor in explaining the difference in Danish and Spanish self-employment rates is the different employment environment that both countries face.self-employment; transitions; gender differences

Domestic transport cost reductions and firms’ export behaviour

Transport infrastructure investment reduces the cost of distance and enables firms to establish and maintain contacts over larger distances. Spain has developed an ambitious road building programme over the last decades, which has considerably reduced transport costs to access European markets. In this paper we depart from the traditional aggregate approach in analysing the impacts of transport infrastructure investment. In particular, we examine the export decision of Spanish manufacturing firms and test how domestic transport cost reductions affect firms’ probability of becoming exporters. We estimate models that control for unobserved heterogeneity among firms, endogeneity and initial conditions problems. Our results provide some support for a positive effect of domestic transport improvements on firms’ exporting probability. However, the magnitude of this effects is small, being the strongest effect the one due to previous export experience which suggests high entry costs into export markets

Legal form and risk exposure in Spanish firms

It is well-known that the legal form adopted by a firm determines the type of legal responsibility borne by its owners in case of bankruptcy. In this paper we argue that a firm under a limited liability status should be characterized by a higher than average bankruptcy probability, which ultimately captures their risk exposure when output is affected by exogenous shocks. To test this prediction we extend Lee’s (1976) switching regressions model to a panel dataset of 1313 Spanish firms from 1990–1994, separating them into corporate and entrepreneurial forms (with/without limited liability, respectively). We consider both random effects and fixed effects panel data models, taking into account the potential endogeneity between risk exposure and the legal form choice. Our results confirm the hypothesis that firms under limited liability have significant higher risk exposure than firms under unlimited liability.Data and financial support provided by the Fundación Empresa Pública (Madrid)Publicad

Transport infraestructure, sunk costs and firms' export behaviour

Transport infrastructure investment reduces the cost of distance and enables firms to establish contacts over larger distances. We study the impact of transport-cost reductions on firms’ export behaviour, accounting for the role of entry costs and other firms’ characteristics. Using Spanish data we estimate dynamic probability models controlling for firms’ unobserved heterogeneity and for the simultaneity of firms’ export and location decisions. Our results provide support for a positive effect of domestic transport improvements on firms’ exporting probability for small and medium sized firms. We find a strong effect of previous export experience, suggesting high entry costs into export markets

Unemployment duration among immigrants and natives: unobserved heterogeneity in a multi-spell duration model

This paper studies whether the unemployment dynamics of immigrants differ from those of natives, paying special attention to the impact of accounting for unobserved heterogeneity among individuals. Using a large administrative data set for Spain, we estimate multiple-spell discrete duration models which disentangle unobserved heterogeneity from duration dependence. Specifically, we estimate random effects models assuming that the distribution of the effects is discrete with finite support, and fixed effects models in which the distribution of the unobserved effects is left unrestricted. Our results show the importance of accounting for unobserved heterogeneity and that mistaken policy implications can be derived due to improper treatment of unmeasured variables. We find that lack of control for unobserved heterogeneity leads to the conclusion that immigrant males have a higher probability of leaving unemployment than natives and that the negative effect of unemployment benefits for immigrants lasts longer than for natives. Nonetheless, the estimates which do control for unobserved heterogeneity show the opposite results

The effect of female participation on fertility in Spain: how does it change as the birth comes closer.

In this paper we anaIyze the effect of female labor force participation on fertility decisions. We focus on two issues that emerge when estimating such effect: (i) the endogeneity between fertility and participation; and (ii) the period in which participation is measured with respect to fertility. We account for the first problem by using an empirical model based on the assumption that women decide on labor force participation and childbearing in response to incentives provided by prices and incomes. The second issue is addressed exploiting the panel structure of our data (matched EPA files). which allow us to measure women labor force participation at several points in the time preceding a birth. Our results show that it is important to account for the endogeneity between participation and fertility and that women's attitude toward the labour market changes along the pregnancy.Fertility; Femal labor force participation; Endogeneity;

Unobserved Heterogeneity in Multi-Spell Discrete Time Duration Models

This paper considers the estimation of discrete time duration models. We highlight the enhance identification opportunities embedded in multiple spell data to separately identify the effect of duration dependence and individual time invariant unobserved heterogeneity. We consider two types of models: (i) random effects models specifying a mass point distribution for the unobserved heterogeneity; and (ii) fixed effects models in which the distribution of the effects is left unrestricted. The availability of multiple spell data allows us to consider this type of models, in the spirit of fixed effects discrete choice panel data models. We study the finite sample properties of different estimators for previous models by means of Monte Carlo simulations. Finally, as an empirical illustration, we estimate unemployment duration models using Spanish administrative data with information on the entire labor history of the individuals.Duration models; Discrete choice; Multiple spells; Unobserved heterogeneity; Unemployment.

Transport infraestructure, sunk costs and firms' export behaviour

Transport infrastructure investment reduces the cost of distance and enables firms to establish contacts over larger distances. We study the impact of transport-cost reductions on firms’ export behaviour, accounting for the role of entry costs and other firms’ characteristics. Using Spanish data we estimate dynamic probability models controlling for firms’ unobserved heterogeneity and for the simultaneity of firms’ export and location decisions. Our results provide support for a positive effect of domestic transport improvements on firms’ exporting probability for small and medium sized firms. We find a strong effect of previous export experience, suggesting high entry costs into export markets.Export decision, Transport infrastructure, Accessibility, Dynamic panel data

Unemployment Duration among Immigrants and Natives: Unobserved Heterogeneity in a Multi-Spell Duration Model

This paper studies whether the unemployment dynamics of immigrants differ from those of natives, paying special attention to the impact of accounting for unobserved heterogeneity among individuals. Using a large administrative data set for Spain, we estimate multiple-spell discrete duration models which disentangle unobserved heterogeneity from duration dependence. Specifically, we estimate random effects models assuming that the distribution of the effects is discrete with finite support, and fixed effects models in which the distribution of the unobserved effects is left unrestricted. Our results show the importance of accounting for unobserved heterogeneity and that mistaken policy implications can be derived due to improper treatment of unmeasured variables. We find that lack of control for unobserved heterogeneity leads to the conclusion that immigrant males have a higher probability of leaving unemployment than natives and that the negative effect of unemployment benefits for immigrants lasts longer than for natives. Nonetheless, the estimates which do control for unobserved heterogeneity show the opposite results.Duration models; Discrete choice; Multiple spells; Unobserved heterogeneity; Unemployment; Immigration.