Article Sidebar

PDF
Date Published: 31/07/2020
Abstract Views: 222
Views PDF: 117
DOI: https://doi.org/10.38203/jiem.020.2.0009
Issue
Vol. 20 No. 2 (2020)
Section
Articles
How to Cite
Le, T. T. H., Bui, T. L., & Nguyen, H. M. (2021). The impact of financial openness on the earnings of self-employed workers - an empirical evidence from a panel dataset. Journal of International Economics and Management, 20(2), 34-48. https://doi.org/10.38203/jiem.020.2.0009
Crossref
Scopus
Google Scholar
Europe PMC

Metrics

The impact of financial openness on the earnings of self-employed workers - an empirical evidence from a panel dataset

Le Thi Thu Huong1,, Bui Thi Ly2, Nguyen Huyen Minh2
1 Colorado State University, Fort Collins, USA
2 Foreign Trade University, Hanoi, Vietnam

Main Article Content

Abstract

This paper contributes to the literature on the effect of financial openness by investigating the factors and determinants which drive the income share to self-employed labor during financial liberalization. The question of the precise impact of liberalization on the share of the self-employed has received less attention in the literature. The authors use a de jure or a rule-based indicator as a measure of capital account openness. The empirical work is applied for a panel dataset of 30 countries during the period of 1970 - 2015. The results from all specifications support the hypothesis that financial integration leads to an increase in the unemployment rate as well as in the income share of self-employed. Nevertheless, the positive relation between financial openness and self-employed income is not evident when we focus solely on developed countries.

Article Details

Keywords

Financial openness, Self-employed workers, Labor share of income

References

Blanchflower, D.G. (2000), “Self-employment in OECD countries”, Labour Economics, Vol. 7 No. 5. pp. 471 - 505.
Campos, N. and Nugent, J. (2012), “The dynamics of the regulation of labor in developing and developed countries since 1960”, Working Paper No. 6881, Institute for the Study of Labor, Bonn.
Chinn, M. and Ito, H. (2007), “A new measure of financial openness”, Journal of Comparative Policy Analysis, Vol. 10 No. 3, pp. 309 - 322.
Diez, F. and Ozdagli, A. (2011), “Self-employment in the global economy”, Working Papers No 11/5, Federal Reserve Bank of Boston.
Diwan, I. (1999), Labor shares and financial crises, Preliminary draft, November XX, World Bank.
Dunhaupt, P. (2013), “The effect of financialization on labor’s share of income”, Working Paper No. 17, Institute for International Political Economy Berlin.
ESA. (2010), European system of account, ESA Publishing.
Fama, E. (1970), “Efficient capital markets: a review of theory and empirical work”, The Journal of Finance, Vol. 25 No. 2, Papers and Proceedings of the Twenty-Eighth Annual Meeting of the American Finance Association New York, (December, 1969): pp. 28 - 30, (May, 1970): pp. 383 - 417.
Goetz, S.J. and Shrestha, S.S. (2009), “Explaining sef-employment success and failure: Wal-mart versus Starbuck, or Schumpeter versus Putnam”, Social Science Quaterly, Vol. 90 No. 1, pp. 22 - 38.
Goetz, S. and Ruspasingha, A. (2013), “The determinants of self-employment growth: insights from county-level data, 2000 - 2009”, Economic Development Quarterly, Vol. 20 No. 10, pp. 1 - 19.
Gourinchas, P. and Jeanne, O. (2006), “The elusive gains from international financial integration”, Review of Economic Studies, Vol. 73 No. 3, pp. 715 - 741.
Guerriero, M. and Sen, K. (2012), “What determines the share of labor in national income? A crosscountry analysis”, Discussion Paper No. 6643, Institute for the Study of Labor.
Guerriero, M. (2012), “The labor share of income around the world: evidence from a panel dataset”, Working Paper No. 920, ADBI Working Paper Series.
Harrison, A.E. (2002), Has globalization eroded labor’s share? some cross-country evidence, Mimeo, University of California Berkeley.
ILO. (2020), “ILOstat”, available at http://ilostat.ilo.org (accessed April 05, 2020).
ILO, IMF, OECD, and WB. (2015), Income inequality and labor income share in G20 countries:
trends, impacts and causes, Prepared for the G20 Labor and Employment Ministers Meeting and Joint Meeting with the G20 Finance Ministers, Ankara, Turkey.
Jayadev, A. (2007), “Capital account openness and the labor share of income”, Cambridge Journal of Economics Advance Access, Vol. 31 No. 3, pp. 423 - 443.
Jayadev, A. and Lee, K. (2003), Capital account liberalization, growth and the labor share of income:
reviewing and extending the cross-country evidence, Mimeo, University of Massachusetts, Amherst.
Krueger, A.B. (1999), “Measuring labor’s share”, American Economic Review, Vol. 89 No. 2, pp. 45 - 51.
Lane, P.R. and Milesi-Ferretti, G.M. (2006), “The external wealth of nations mark II: revised and extended estimates of foreign assets and liabilities, 1970 - 2004”, IMF Working Papers No. 06/69, International Monetary Fund.
Le, A.T. (1999), “Empirical studies of self-employment”, Journal of Economic Surveys, Vol. 13 No. 4, pp. 338 - 417.
McKinnon, R. (1973), Money and capital in economic development, The Brooking Institution.
Mezzetti, C. and Dinopoulos, E. (1991), “Domestic unionization and import competition”, Journal of International Economics, Vol. 31 No. 1 - 2, pp. 79 - 100.
Munro, L. (2005), “A literature review on trade and informal labor markets in developing countries”, Working Papers No. 132, OECD Trade Policy.
Orgiazzi, E. (2007), “Financial development and instability: the role of the labor share”, Research in Economics, Vol. 62 No. 4, pp. 215 - 236.
Parker, S.C. (2004), The economics of self-employment and entrepreneurship, Cambridge University Press.
Shaw, E. (1973), Financial deepening in economic activity, Oxford University Press, New York.
Torres-Reyna, O. (2007), Panel data analysis: fixed and random effects using Stata, Princeton University.