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Testing the 'Residential Rootedness'-Hypothesis of Self-Employment for Germany and the UK

  • Reuschke, Darja

    ()

    (University of St. Andrews)

  • van Ham, Maarten

    ()

    (Delft University of Technology)

Based on the notion that entrepreneurship is a 'local event', the literature argues that self-employed workers and entrepreneurs are 'rooted' in place. This paper tests the 'residential rootedness'-hypothesis of self-employment by examining for Germany and the UK whether the self-employed are less likely to move or migrate than employees. Using longitudinal data from the German Socio-economic Panel Study (SOEP) and the British Household Panel Survey (BHPS) and accounting for transitions in employment status we found little evidence that the self-employed in Germany and the UK are more rooted in place than employees. Firstly, the self-employed are not less likely to move or migrate over the period 2001–08. Secondly, those who are currently self-employed are also not more likely to have remained in the same place over a period of three years (2008–06 and 2005–03) as compared to those who are currently employed. Thirdly, those who are continuously self-employed are not less likely to have moved or migrated over a 3-period than those in continuous paid employment. Fourthly, in contrast to the prevalent 'residential rootedness'-hypothesis in economic geography and regional studies, we found that the entry into and the exit from self-employment are associated with internal migration.

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File URL: http://ftp.iza.org/dp6062.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6062.

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Length: 20 pages
Date of creation: Oct 2011
Date of revision:
Publication status: published in: [Environment and Planning A] , 2013, 45 (5), 1219-1239
Handle: RePEc:iza:izadps:dp6062
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  1. Martin Andersson & Sierdjan Koster, 2011. "Sources of persistence in regional start-up rates--evidence from Sweden," Journal of Economic Geography, Oxford University Press, vol. 11(1), pages 179-201, January.
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