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Self-employment dynamics in rural and urban labour markets

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  • Hannu Tervo

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Abstract

Only few in-depth studies of the alternation between different labour market states have been published. This paper deals with the alternation between self-employment, paid-employment and non-employment in Finland in 1987-1999, paying special attention to differences in self-employment dynamics between areas characterized by different labour market conditions, viz. rural and urban locations. The analysis is based on a one-percent random sample drawn from panel data on the census and longitudinal employment statistics. The results show differences in the transition processes between the three labour market states by the type of area. The results suggest that alternation between different employment options is likely to increase, if employment opportunities remain low in local labour markets. Five major types of working careers are identified, all of which are more common in rural than urban areas. The type of area is importantly related to alternating working careers even when all the important control variables are included into the models.

Suggested Citation

  • Hannu Tervo, 2004. "Self-employment dynamics in rural and urban labour markets," ERSA conference papers ersa04p396, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa04p396
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    References listed on IDEAS

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    1. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
    2. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    3. Carrasco, Raquel, 1999. " Transitions to and from Self-employment in Spain: An Empirical Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 315-341, August.
    4. Jaakko Pehkonen & Hannu Tervo, 1998. "Persistence and Turnover in Regional Unemployment Disparities," Regional Studies, Taylor & Francis Journals, vol. 32(5), pages 445-458.
    5. Niittykangas, Hannu & Tervo, Hannu, 2002. "Intergenerational mobility in self-employment: a regional approach," ERSA conference papers ersa02p350, European Regional Science Association.
    6. Aki Kangasharju & Sari Pekkala, 2001. "The Role of Education in Self-Employment Success," Studies in Economics 0116, School of Economics, University of Kent.
    7. Levesque, Moren & Shepherd, Dean A. & Douglas, Evan J., 2002. "Employment or self-employment: A dynamic utility-maximizing model," Journal of Business Venturing, Elsevier, vol. 17(3), pages 189-210, May.
    8. Ritsila, Jari & Tervo, Hannu, 2002. "Effects of Unemployment on New Firm Formation: Micro-level Panel Data Evidence from Finland," Small Business Economics, Springer, vol. 19(1), pages 31-40, August.
    9. Aki Kangasharju, 2002. "The Role of Education in Self-Employment Success in Finland," Growth and Change, Wiley Blackwell, vol. 33(2), pages 216-237.
    10. Hyytinen, Ari & Ilmakunnas, Pekka, 2004. "Entrepreneurial Aspirations," Discussion Papers 890, The Research Institute of the Finnish Economy.
    11. Raquel Carrasco & Mette Ejrnæs, 2003. "Self-employment in Denmark and Spain: Institution, Economic Conditions and Gender differences," CAM Working Papers 2003-06, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
    12. Lazear, Edward, 2003. "Entrepreneurship," IZA Discussion Papers 760, Institute for the Study of Labor (IZA).
    13. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, April.
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    Cited by:

    1. Dimitrios Ierapetritis & Dimitrios Lagos, 2011. "Lifelong Learning As A Pillar Of Entrepreneurship In The Greek Countryside," ERSA conference papers ersa10p1510, European Regional Science Association.
    2. Mika Haapanen & Hannu Tervo, 2009. "Self-employment duration in urban and rural locations," Applied Economics, Taylor & Francis Journals, vol. 41(19), pages 2449-2461.
    3. Hannu Tervo, 2006. "Regional unemployment, self-employment and family background," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 1055-1062.
    4. Stanislaw Cichocki, 2012. "Self-employment and the business cycle: evidence from Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 24(2), pages 219-239, January.

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