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Baumol’s migrants: Productive and unproductive entrepreneurship and between-MSA migration

Author

Listed:
  • Callais, Justin T.
  • Geloso, Vincent
  • Plemmons, Alicia
  • Wagner, Gary A.

Abstract

William Baumol proposes that there are two types of entrepreneurship: productive or unproductive. Productive entrepreneurship, characterized by innovation and efficient resource allocation, fosters economic growth and can act as a potent magnet for migration. Conversely, unproductive entrepreneurship, which often involves rent-seeking and regulatory circumvention, deters migration and potentially provokes out-migration. To test this link from the types of entrepreneurship and migration, we use a new index of entrepreneurship (productive and unproductive) in conjunction with a dataset covering migration to and from Metropolitan Statistical Areas (MSA) from 2005 to 2019. Our analysis reveals that regions high in productive entrepreneurship experience significant net in-migration, while those dominated by unproductive entrepreneurship see the opposite effect.

Suggested Citation

  • Callais, Justin T. & Geloso, Vincent & Plemmons, Alicia & Wagner, Gary A., 2025. "Baumol’s migrants: Productive and unproductive entrepreneurship and between-MSA migration," European Journal of Political Economy, Elsevier, vol. 90(PB).
    • Handle: RePEc:eee:poleco:v:90:y:2025:i:pb:s017626802500093x
    DOI: 10.1016/j.ejpoleco.2025.102733
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