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Self-employment duration in urban and rural locations

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  • Mika Haapanen
  • Hannu Tervo

Abstract

Previous research has shown that the local environment is important for self-employment. The dynamics of self-employment varies between areas characterized by different labour market conditions, entrepreneurial traditions and other structural factors. This article analyses self-employment spells in Finland with a large register-based data set from the period 1987 to 2002. The main aim is to investigate the role of region-specific factors as compared with individual-specific and other factors on the duration of self-employment spells. First, the descriptive analysis shows that the exit rates from self-employment and the length of self-employment spells depend upon location (urban versus rural area) and the cyclical trends in the economy. Second, self-employment duration is modelled using discrete time survival analysis. It is found that rural areas have significantly lower exit rates in the first years of self-employment than urban areas.

Suggested Citation

  • Mika Haapanen & Hannu Tervo, 2009. "Self-employment duration in urban and rural locations," Applied Economics, Taylor & Francis Journals, vol. 41(19), pages 2449-2461.
    • Handle: RePEc:taf:applec:v:41:y:2009:i:19:p:2449-2461
    DOI: 10.1080/00036840802360278
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