Autoempleo y Machine Learning: Una aplicación para España

Gutierrez-Lythgoe, Antonio (2023): Autoempleo y Machine Learning: Una aplicación para España.

Abstract

Research in the field of Artificial Intelligence has made considerable progress in recent years, demonstrating its effectiveness in predicting and classifying discrete decisions. However, these advances have been relatively underutilized in economic research due to the lack of links with economic theories that explain the decision-making process of agents. In this paper, we propose a microeconomic framework for decision trees, a machine learning technique, to establish a more solid connection with economic theory and encourage its application in the field of discrete choice. To do so, we rely on data from the 2019 EU-SILC for Spain. Through comparison with a conventional multinomial logit model, we demonstrate the usefulness of this economic perspective for studying the sociodemographic factors associated with self-employment in Spain. The results suggest that incorporating economic foundations can significantly improve the accuracy of predictions and the ability to draw individual sociodemographic profiles for self-employment.

• Item Type: MPRA Paper
• English Title: Self-employment and Machine Learning: An application for Spain.
• Language: Spanish
• Keywords: Artificial Intelligence; Machine Learning; Microeconomics; Self-employment; multinomial logit
• Subjects: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C45 - Neural Networks and Related Topics; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C53 - Forecasting and Prediction Methods ; Simulation Methods; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J62 - Job, Occupational, and Intergenerational Mobility; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L26 - Entrepreneurship

References

Alba-Ramirez, A. (1994). Self-employment in the midst of unemployment: the case of Spain and the United States. Applied Economics, 26(3), 189–204.

Athey, S., & Imbens, G. W. (2019). Machine learning methods that economists should know about. Annual Review of Economics, 11, 685–725.

Barrado, B., & Molina, J. A. (2015). Factores macroeconómicos que estimulan el emprendimiento. Un análisis para los países desarrollados y no desarrollados. Documento de Trabajo 2015-06. Facultad de Economía y Empresa. Universidad de Zaragoza

Belloc, I., Molina, J. A., & Velilla, J. (2022). Living in rural areas and self-employment. IZA DP, nº 15059.

Brathwaite, T., Vij, A., & Walker, J. L. (2017). Machine learning meets microeconomics: The case of decision trees and discrete choice. ArXiv Preprint ArXiv:1711.04826.

Breiman, L. (1984). Classification and Regression Trees (1st ed.). Routledge. https://doi.org/10.1201/9781315139470

Breiman, L. (2001). Statistical modeling: The two cultures (with comments and a rejoinder by the author). Statistical Science, 16(3), 199–231.

Campaña, J.C., Giménez-Nadal, J.I. and Molina, J.A. (2020). Self-employed and employed mothers in Latin American families: are there differences in paid-work, unpaid work and child care? Journal of Family and Economic Issues, 41, 52-69. https://doi.org/10.1007/s10834-020-09660-5.

Carrasco, R. (1999). Transitions to and from self‐employment in Spain: an empirical analysis. Oxford Bulletin of Economics and Statistics, 61(3), 315–341.

Congregado, E., Golpe, A. A., & Carmona, M. (2010). Is it a good policy to promote self-employment for job creation? Evidence from Spain. Journal of Policy Modeling, 32(6), 828–842. https://doi.org/https://doi.org/10.1016/j.jpolmod.2010.09.001

Cueto, B., Mayor, M., & Suárez, P. (2015). Entrepreneurship and unemployment in Spain: a regional analysis. Applied Economics Letters, 22(15), 1230–1235.

Dunn, T., & Holtz-Eakin, D. (2000). Financial capital, human capital, and the transition to self-employment: Evidence from intergenerational links. Journal of labor economics, 18(2), 282-305.

Einhorn, H. J. (1970). The use of nonlinear, noncompensatory models in decision making. Psychological Bulletin, 73(3), 221.

Ferrando-Latorre, S., Velilla, J., & Ortega, R. (2019). Intergenerational Transmission of Entrepreneurial Activity in Spanish Families. Journal of Family and Economic Issues, 40(3), 390–407. https://doi.org/10.1007/s10834-019-09613-7

Gimenez-Nadal, J. I., Molina, J. A., & Ortega, R. (2012). Self-employed mothers and the work-family conflict. Applied Economics, 44(17), 2133–2147. https://doi.org/10.1080/00036846.2011.558486

Giménez, J.I. , Molina, J.A. and Velilla, J. (2018). The commuting behavior of workers in the United States: differences between the employed and the self-employed. Journal of Transport Geography, 66, 19-29. https://doi.org/10.1016/j.jtrangeo.2017.10.011.

Giménez-Nadal, J.I., Molina, J.A. and Velilla, J. (2020). Commuting and self-employment in Western Europe. Journal of Transport Geography, 88. 102856. https://doi.org/10.1016/j.trangeo.2020.102856.

Giménez-Nadal, J. I., Molina, J. A., & Velilla, J. (2022a). Intergenerational correlation of self-employment in Western Europe. Economic Modelling, 108. https://doi.org/10.1016/j.econmod.2021.105741

Giménez-Nadal, J. I., Molina, J. A., & Velilla, J. (2022b). Occupational sorting and the transmission of self-employment between generations. Applied Economics Letters, 1-4.

Gimenez-Nadal, J. I., & Ortega-Lapiedra, R. (2010). Self-employment and time stress: The effect of leisure quality. Applied Economics Letters, 17(17), 1735–1738.

Hauser, J. R., Toubia, O., Evgeniou, T., Befurt, R., & Dzyabura, D. (2010). Disjunctions of conjunctions, cognitive simplicity, and consideration sets. Journal of Marketing Research, 47(3), 485–496.

Koellinger, P., Minniti, M., & Schade, C. (2013). Gender Differences in Entrepreneurial Propensity. Oxford Bulletin of Economics and Statistics, 75(2), 213–234. https://doi.org/10.1111/j.1468-0084.2011.00689.x

Liñán, F., Urbano, D., & Guerrero, M. (2011). Regional variations in entrepreneurial cognitions: Start-up intentions of university students in Spain. Entrepreneurship and Regional Development, 23(3–4), 187–215.

Loh, W. (2011). Classification and regression trees. Wiley Interdisciplinary Reviews: Data Mining and Knowledge Discovery, 1(1), 14–23.

McFadden, D. (1973) Conditional Logit Analysis of Qualitative Choice Behavior. In P. Zarembka (Ed.), Frontiers in Econometrics. New York: Wiley.

Molina, J. A. (2020). Family and Entrepreneurship: New Empirical and Theoretical Results. In Journal of Family and Economic Issues (Vol. 41, Issue 1). Springer. https://doi.org/10.1007/s10834-020-09667-y

Molina, J. A., Velilla, J., & Ortega, R. (2016a). Entrepreneurial activity in the OECD: Pooled and cross-country evidence. MPRA Paper 71592.

Molina, J. A., Velilla, J., & Ortega, R. (2016b). The decision to become an entrepreneur in Spain: the role of household finances. International Journal of Entrepreneurship, 20, 57.

Parady, G., Ory, D., & Walker, J. (2021). The overreliance on statistical goodness-of-fit and under-reliance on model validation in discrete choice models: A review of validation practices in the transportation academic literature. In Journal of Choice Modelling (Vol. 38). Elsevier Ltd. https://doi.org/10.1016/j.jocm.2020.100257

Paredes, M., Hemberg, E., O’Reilly, U.-M., & Zegras, C. (2017). Machine learning or discrete choice models for car ownership demand estimation and prediction? 2017 5th IEEE International Conference on Models and Technologies for Intelligent Transportation Systems (MT-ITS), 780–785.

Parker, S. C. (2004). The economics of self-employment and entrepreneurship. Cambridge university press.

Salas-Velasco, M. (2023). Propensity for Self-Employment in a Model of Occupational Choice: Evidence from a Cohort of Recent University Graduates in Spain. Sustainability, 15(4), 3400.

Simoes, N., Crespo, N., & Moreira, S. B. (2016). Individual determinants of self‐employment entry: What do we really know?. Journal of economic surveys, 30(4), 783-806.

Tversky, A. (1972). Elimination by aspects: A theory of choice. Psychological Review, 79(4), 281.

Tversky, A., & Kahneman, D. (1989). Rational choice and the framing of decisions. Multiple Criteria Decision Making and Risk Analysis Using Microcomputers, 81–126.

Velilla, J., Molina, J. A., & Ortega, R. (2018). Why older workers become entrepreneurs? International evidence using fuzzy set methods. Journal of the Economics of Ageing, 12, 88–95. https://doi.org/10.1016/j.jeoa.2018.03.004

Velilla, J., Molina, J. A., & Ortega, R. (2020). Entrepreneurship among low-, mid-and high-income workers in South America: a fuzzy-set analysis. IZA DP, nº 13209.

Wooldridge, J. M. (2015). Introductory econometrics: A modern approach. Cengage learning.