The Declining Local Bias of Entrepreneurship in the United States

Innessa Colaiacovo, Margaret Dalton, Sari Pekkala Kerr and William R. Kerr

AEA Papers and Proceedings, 2026, vol. 116, 241-245

Abstract: Multiple studies document a local bias of entrepreneurship (LBE) in recent decades, where self-employed entrepreneurs are systematically more likely than wage workers to operate in their region of birth. This paper documents an important new fact: The LBE has been declining in the United States since 1970. The LBE is still present for white men engaged in self-employment, but it no longer exists for the overall US-born workforce. We connect that decline to the transformation of self-employment away from high startup capital sectors and the reduced opportunity for local self-employed entrepreneurs to achieve high incomes compared to wage work.

JEL-codes: D22 G32 J23 L26 M13 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:aea:apandp:v:116:y:2026:p:241-245

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DOI: 10.1257/pandp.20261003

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