Relationship between Direct Selling and Unemployment: Worldwide Evidence

Abstract

An analysis of the relationship between the percentage of direct sellers (DSP) and the unemployment rate in WFDSA member countries has been carried out by applying a panel data model for the period from 2015 to 2019. The results reveal that this connection exhibits a positive and statistically significant correlation, standing out especially in the Americas and Asia Pacific regions. In the context of developing economies, this study has identified a more pronounced relationship, evidencing that a 1% increase in the unemployment rate translates into a significant 0.38 increase in the percentage of direct sellers. In contrast, in developed countries, this increase is more modest, at 0.07. This finding highlights the sensitivity of the direct selling industry to economic and labor dynamics, showing a more robust response in emerging economic environments.The significant contribution of this research to the literature lies in being a study that examines both temporal and cross-sectional variability in the relationship between the percentage of direct sellers and the unemployment rate. By addressing this research gap, it has provided a more comprehensive and enriching perspective on the dynamics of these variables over time and across geographic regions. In addition, the study underscores the crucial relevance of the direct selling industry in the global economy. By becoming a significant alternative for unemployed individuals, this form of commerce emerges as an important catalyst for income generation in times of job uncertainty. This finding highlights the ability of direct selling to not only provide economic opportunities for individuals seeking employment, but also to adapt and thrive in changing economic environments, presenting itself as a valuable and dynamic option in the contemporary employment landscape.