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Self-employment and Job Generation in Metropolitan Areas, 1969-2009

  • André van Stel
  • Martin Carree
  • Emilio Congregado
  • Antonio Golpe

Many regional development policy initiatives assume that entrepreneurial activities promote economic growth. Empirical research has presented rationale for this argument showing that small firms create proportionally more new jobs than large ones. However, little research has been performed on the issue of net job generation at the urban level, particularly when self-employment is considered as an indicator of entrepreneurial activities. This paper investigates to what extent U.S. metropolitan areas in the 1969-2009 period characterized by relatively high rates of self-employment also have shown relatively high rates of subsequent total employment growth. The analysis corrects for the influence of sectoral composition, wage level, educational attainment, presence of research universities and size of the metropolitan area to measure the extent to which the number and quality of self-employed in a region contribute to total employment growth. It finds the relationship between self-employment rates and subsequent total employment growth to be positive on average during the forty-year period but to weaken over time.

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Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H201306.

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Length: 26 pages
Date of creation: 18 Apr 2013
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Handle: RePEc:eim:papers:h201306
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