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Self-employment duration in urban and rural locations

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  • Hannu Tervo

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  • Mika Haapanen

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Abstract

Previous research has shown that local environment is important for self-employment. Self-employment dynamics varies between areas characterized by different labour market conditions, entrepreneurial tradition and other structural factors. Alternation between different labour market states (self-employment, paid-employment, non-employment) is also likely to increase if employment opportunities remain low in local labour market markets. This paper analyses the factors influencing the duration of self-employment spells in Finland with a large registered-based data set from the period of 1987-2002. It is evident that rates of exit out of self-employment and the length of self-employment spells depend upon personal characteristics and cyclical trends in the economy. The main aim is to analyse the role of region-specific factors as compared with individual specific and other factors on the duration of self-employment spells. Self-employment duration is modelled by using discrete survival analysis. First, descriptive analysis is done. Second, simple Cox proportional hazard models are estimated. Third, more complex hazard models e.g. with competing risks are used.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p315.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p315

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References

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  1. Ritsila, Jari & Tervo, Hannu, 2002. " Effects of Unemployment on New Firm Formation: Micro-level Panel Data Evidence from Finland," Small Business Economics, Springer, Springer, vol. 19(1), pages 31-40, August.
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  3. Aki Kangasharju, 2002. "The Role of Education in Self-Employment Success in Finland," Growth and Change, Gatton College of Business and Economics, University of Kentucky, Gatton College of Business and Economics, University of Kentucky, vol. 33(2), pages 216-237.
  4. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521030632.
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  6. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  7. Aki Kangasharju & Sari Pekkala, 2001. "The Role of Education in Self-Employment Success," Studies in Economics, Department of Economics, University of Kent 0116, Department of Economics, University of Kent.
  8. Hannu Tervo, 2004. "Self-employment dynamics in rural and urban labour markets," ERSA conference papers, European Regional Science Association ersa04p396, European Regional Science Association.
  9. Hannu Niittykangas & Hannu Tervo, 2005. "Spatial variations in intergenerational transmission of self-employment," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 39(3), pages 319-332.
  10. Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
  11. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, Econometric Society, vol. 50(3), pages 649-70, May.
  12. Taylor, Mark P, 1999. "Survival of the Fittest? An Analysis of Self-Employment Duration in Britain," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 109(454), pages C140-55, March.
  13. Carrasco, R., 1997. "Transitions to and from Self-Employment in Spain: An Empirical Analysis," Papers, Centro de Estudios Monetarios Y Financieros- 9710, Centro de Estudios Monetarios Y Financieros-.
  14. Raquel Carrasco & Mette Ejrnæs, 2003. "Self-employment in Denmark and Spain: Institution, Economic Conditions and Gender differences," CAM Working Papers, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics 2003-06, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  15. Sueyoshi, Glenn T, 1995. "A Class of Binary Response Models for Grouped Duration Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 10(4), pages 411-31, Oct.-Dec..
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Citations

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Cited by:
  1. Klaesson, Johan & Larsson, Johan P, 2014. "Education and Self-employment Propensity," Working Paper Series in Economics and Institutions of Innovation, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies 345, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  2. Hyytinen, Ari & Rouvinen, Petri, 2008. "The Labour Market Consequences of Self-employment Spells: European Evidence," Discussion Papers, The Research Institute of the Finnish Economy 1129, The Research Institute of the Finnish Economy.
  3. Millán, José María & Congregado, Emilio & Román, Concepción, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE.
  4. Millán, José María & Congregado, Emilio & Román, Concepción, 2014. "Persistence in entrepreneurship and its implications for the European entrepreneurial promotion policy," Journal of Policy Modeling, Elsevier, Elsevier, vol. 36(1), pages 83-106.
  5. Jose Maria Millan & Emilio Congregado & Concepcion Roman & Mirjam van Praag & Andre van Stel, 2011. "The Value of an Educated Population for an Individual's Entrepreneurship Success," Tinbergen Institute Discussion Papers, Tinbergen Institute 11-066/3, Tinbergen Institute, revised 06 May 2014.
  6. Dirk Oberschachtsiek, 2012. "The experience of the founder and self-employment duration: a comparative advantage approach," Small Business Economics, Springer, Springer, vol. 39(1), pages 1-17, July.
  7. Oberschachtsiek, Dirk, 2010. "How do local labor market conditions and individual characteristics affect quitting selfemployment?," Discussion Papers, Presidential Department, Social Science Research Center Berlin (WZB) P 2010-001, Social Science Research Center Berlin (WZB).
  8. José Millán & Emilio Congregado & Concepción Román, 2012. "Determinants of self-employment survival in Europe," Small Business Economics, Springer, Springer, vol. 38(2), pages 231-258, February.
  9. Vera Rocha & Anabela Carneiro & Celeste Amorim Varum, 2013. "Entrepreneurship Dynamics: Entry Routes, Business-Owner's Persistence and Exit Modes," CEF.UP Working Papers, Universidade do Porto, Faculdade de Economia do Porto 1310, Universidade do Porto, Faculdade de Economia do Porto.
  10. André van Stel & José Maria Millán & Concepcion Roman, 2013. "Investigating the impact of the technological environment on survival chances of employer entrepreneurs," Scales Research Reports, EIM Business and Policy Research H201208, EIM Business and Policy Research.

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