Labor market hysteresis of self-employment: A case of the Czech manufacturing sector

Abstract

The self-employed are considered key drivers of economic growth and the promotion of a sustainable society. Still, a possible economic crisis always brings threats and opportunities for self-employment. This article analyzes the hysteresis of self-employment in the Czech Republic manufacturing sector. The authors deal with the research question of whether self-employed people behave differently from employees during an economic crisis. An unemployment model was created from the analysis. This model contains independent variables (employees and self-employed in C-Manufacturing, previous unemployment, and dummy variables reflecting economic crisis). The self-employed have been identified as a tool to slow down unemployment. The authors emphasize the high level of vulnerability of the self-employed, and therefore a part of the article is devoted to the economic policy of the state. In addition, the data are compared with Germany, which is the Czech Republic’s main trading partner. The new internet services and remote controls under manufacturing seem to be an important opportunity for the self-employed and sustainable development.