Abstract

The study investigates the relationship between three different types of unemployment and urban self-employment in China. In spite of numerous studies on factors driving entrepreneurship and self-employment, previous literature has not shed a consistent light on the association between unemployment and self-employment. This study therefore drills down to three different types of unemployment#x2014;retirement resignation, and layoff to further conduct this investigation. Data from the China Labor Statistical Yearbooks are used. A panel data model is adopted to examine three different unemployment forces for self-employment propensity#x2014;retirement propensity, resignation propensity, and layoff propensity among the unemployed. We found that retirement and resignation among those unemployed are associated with self-employment rate growth, while the effect of those laid-off is unclear. The study interpreted the findings and indicated research limitations and future research directions.