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Self-employment duration in urban and rural locations

  • Hannu Tervo


  • Mika Haapanen


Previous research has shown that local environment is important for self-employment. Self-employment dynamics varies between areas characterized by different labour market conditions, entrepreneurial tradition and other structural factors. Alternation between different labour market states (self-employment, paid-employment, non-employment) is also likely to increase if employment opportunities remain low in local labour market markets. This paper analyses the factors influencing the duration of self-employment spells in Finland with a large registered-based data set from the period of 1987-2002. It is evident that rates of exit out of self-employment and the length of self-employment spells depend upon personal characteristics and cyclical trends in the economy. The main aim is to analyse the role of region-specific factors as compared with individual specific and other factors on the duration of self-employment spells. Self-employment duration is modelled by using discrete survival analysis. First, descriptive analysis is done. Second, simple Cox proportional hazard models are estimated. Third, more complex hazard models e.g. with competing risks are used.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p315.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p315
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  1. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, October.
  2. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  3. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
  4. Douglas Holtz-Eakin & David Joulfaian & Harvey Rosen, 1993. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Working Papers 698, Princeton University, Department of Economics, Industrial Relations Section..
  5. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July.
  6. Tervo, Hannu & Ritsilä, Jari, 2000. "Effects Of Unemployment On New Firm Formation:Micro-Level Panel Data Evidence From Finland," ERSA conference papers ersa00p88, European Regional Science Association.
  7. Aki Kangasharju, 2002. "The Role of Education in Self-Employment Success in Finland," Growth and Change, Wiley Blackwell, vol. 33(2), pages 216-237.
  8. Carrasco, R., 1997. "Transitions to and from Self-Employment in Spain: An Empirical Analysis," Papers 9710, Centro de Estudios Monetarios Y Financieros-.
  9. Hannu Tervo, 2004. "Self-employment dynamics in rural and urban labour markets," ERSA conference papers ersa04p396, European Regional Science Association.
  10. Taylor, Mark P, 1999. "Survival of the Fittest? An Analysis of Self-Employment Duration in Britain," Economic Journal, Royal Economic Society, vol. 109(454), pages C140-55, March.
  11. Aki Kangasharju & Sari Pekkala, 2001. "The Role of Education in Self-Employment Success," Studies in Economics 0116, School of Economics, University of Kent.
  12. Sueyoshi, Glenn T, 1995. "A Class of Binary Response Models for Grouped Duration Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(4), pages 411-31, Oct.-Dec..
  13. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  14. Hannu Niittykangas & Hannu Tervo, 2005. "Spatial variations in intergenerational transmission of self-employment," Regional Studies, Taylor & Francis Journals, vol. 39(3), pages 319-332.
  15. 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.
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