Self-employment and entrepreneurship in urban and rural labour markets

Faggio, Giulia and Silva, Olmo ORCID: 0009-0005-6918-2206 (2014) Self-employment and entrepreneurship in urban and rural labour markets. Journal of Urban Economics, 84. pp. 67-85. ISSN 0094-1190

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Abstract

We study the link between self-employment and some salient aspects of entrepreneurship – namely business creation and innovation – in urban and rural labour markets. In order to do so, we combine individual and firm-level data for Britain aggregated at the Travel-to-Work Area level. We find that a higher incidence of self-employment positively and strongly correlates with business creation and innovation in urban areas, but not in rural areas. We also document that more rural than urban workers become self-employed in areas with comparably poor labour market opportunities, although this heterogeneity is not evident when focussing on entrepreneurship. Finally, we show that the misalignment between self-employment and our proxies for entrepreneurship in rural areas disappears once we account for local labour market conditions. Our results suggest that self-employment, business creation and innovation are well lined-up in urban areas because they capture the same economic phenomenon – namely, genuine entrepreneurship. This is not the case for rural areas.

Item Type:	Article
Official URL:	http://www.sciencedirect.com/science/journal/00941...
Additional Information:	© 2014 The Authors. Published by Elsevier Inc. © CC BY 3.0
Divisions:	Geography & Environment Spatial Economics Research Centre Centre for Economic Performance
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Date Deposited:	28 Oct 2014 13:50
Last Modified:	21 Nov 2024 04:33
URI:	http://eprints.lse.ac.uk/id/eprint/59968

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