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The Economic Impacts of Self-Employment

Author

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  • Goetz, Stephan J.
  • Fleming, David A.
  • Rupasingha, Anil

Abstract

Even as self-employment continues to increase, policymakers remain largely unaware of this trend and fail to see it as an opportunity for addressing enduring joblessness. In part, this is explained by limited data on the self-employed and by widespread perceptions that returns to self-employment are low; that the self-employed are merely patching together piecemeal work opportunities requiring limited skills; and that there are no local economic impacts or spillover benefits into other sectors. Contrary to these perceptions, recent studies suggest that self-employment has tangible positive economic impacts not only on wage and salary employment but also on per capita income growth and poverty reduction. This article synthesizes the pertinent emerging literature and assesses dynamics of the lags involved between self-employment shocks and subsequent employment growth.

Suggested Citation

  • Goetz, Stephan J. & Fleming, David A. & Rupasingha, Anil, 2012. "The Economic Impacts of Self-Employment," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(03), August.
  • Handle: RePEc:ags:joaaec:130267
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    References listed on IDEAS

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    1. C. Praag & Peter Versloot, 2007. "What is the value of entrepreneurship? A review of recent research," Small Business Economics, Springer, vol. 29(4), pages 351-382, December.
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    3. Stephan J. Goetz & David L. Debertin, 2001. "Why Farmers Quit: A County-Level Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 1010-1023.
    4. Scott Loveridge & Denys Nizalov, 2007. "Operationalizing the Entrepreneurial Pipeline Theory: An Empirical Assessment of the Optimal Size Distribution of Local Firms," Economic Development Quarterly, , vol. 21(3), pages 244-262, August.
    5. Stephan J Goetz & Mark D Partridge & Dan S Rickman & Shibalee Majumdar, 2011. "Sharing the gains of local economic growth: race-to-the-top versus race-to-the-bottom economic development," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 29(3), pages 428-456, June.
    6. Zoltán J. Ács & Pamela Mueller, 2015. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Chapters,in: Global Entrepreneurship, Institutions and Incentives, chapter 16, pages 304-319 Edward Elgar Publishing.
    7. Goetz, Stephan J. & Partridge, Mark D. & Deller, Steven C. & Fleming, David A., 2010. "Evaluating U.S. Rural Entrepreneurship Policy," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 40(1).
    8. Shrestha, Sundar S. & Goetz, Stephan J. & Rupasingha, Anil, 2007. "Proprietorship Formations and U.S. Job Growth," The Review of Regional Studies, Southern Regional Science Association, vol. 37(2), pages 146-168.
    9. Anil Rupasingha & Stephan J. Goetz, 2013. "Self-employment and local economic performance: Evidence from US counties," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 141-161, March.
    10. Michael Fritsch, 2008. "How does new business formation affect regional development? Introduction to the special issue," Small Business Economics, Springer, vol. 30(1), pages 1-14, January.
    11. Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 961-975.
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    13. Steven Deller & James McConnon, 2009. "Microenterprises and economic growth: a panel study of the US states 1977-1997," Applied Economics Letters, Taylor & Francis Journals, vol. 16(13), pages 1307-1312.
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    Citations

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    Cited by:

    1. David A. Fleming & Thomas G. Measham & Dusan Paredes, 2015. "Understanding the resource curse (or blessing) across national and regional scales: Theory, empirical challenges and an application," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(4), pages 624-639, October.
    2. Tsvetkova, Alexandra & Partridge, Mark, 2017. "The shale revolution and entrepreneurship: An assessment of the relationship between energy sector expansion and small business entrepreneurship in US counties," Energy, Elsevier, vol. 141(C), pages 423-434.
    3. repec:spr:jglont:v:8:y:2018:i:1:d:10.1186_s40497-018-0097-3 is not listed on IDEAS
    4. Tsvetkova, Alexandra & Partridge, Mark & Betz, Micael, 2016. "Entrepreneurial and Wage and Salary Employment Response to Economic Conditions Across the Rural-Urban Continuum," MPRA Paper 75781, University Library of Munich, Germany.
    5. Giuliano Guerra, 2011. "The Role of Job Satisfaction in Transitions into Self-Employment," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1201, USI Università della Svizzera italiana.
    6. Tsvetkova, Alexandra & Partridge, Mark & Betz, Michael, 2016. "Self-employment effects on regional growth: A bigger bang for a buck?," MPRA Paper 75777, University Library of Munich, Germany.
    7. Fannin, James Matthew, 2012. "Discussion: Economic Opportunities in Rural Communities," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(03), August.
    8. Brian Whitacre & Roberto Gallardo & Sharon Strover, 2014. "Does rural broadband impact jobs and income? Evidence from spatial and first-differenced regressions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(3), pages 649-670, November.
    9. Conley, Kelsey & Whitacre, Brian, 2015. "Does Broadband Matter for Rural Entrepreneurs or ‘Creative Class’ Employees?," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196832, Southern Agricultural Economics Association.
    10. Albiol Sanchez, Judit & Diaz-Serrano, Luis & Teruel, Graciela, 2015. "Is Self-employment a Way to Escape from Skill Mismatches?," IZA Discussion Papers 9008, Institute for the Study of Labor (IZA).
    11. Stevenson, Marcie & Artz, Georgeanne, 2017. "Improving rural business development, one firm at a time: A look at the effects of the USDA’s Value-Added Producer Grant on firm survival," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252785, Southern Agricultural Economics Association.
    12. Albiol, Judit & Díaz Serrano, Lluís & Teruel, Mercedes, 2014. "Is Self-employment a Way to Escape from Skill Mismatches?," Working Papers 2072/247652, Universitat Rovira i Virgili, Department of Economics.

    More about this item

    Keywords

    economic impacts; labor; rural development; self-employment; Community/Rural/Urban Development; J54; O16; R11;

    JEL classification:

    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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