Self-employment effects on regional growth: a bigger bang for a buck?

Alexandra Tsvetkova, Mark Partridge and Michael Betz ()

Small Business Economics, 2019, vol. 52, issue 1, No 3, 27-45

Abstract: Abstract This paper estimates the net employment spillovers from changes in self-employment (SE) and compares them to spillovers from changes in wage and salary (WS) employment using US county-level data. Our findings offer a policy-relevant perspective on the relative importance of SE and WS employment and help bridge two entrepreneurship research traditions. Our estimated effects of self-employment, at the margin, are substantially larger than identical effects of paid employment. This supports the literature that points to a special role played by self-employed businesses in economic growth. At the same time, the little attention given to SE as a potential engine of growth among policymakers and scholars can be explained, at least in part, by the relatively small total economic impact of self-employment stemming from its small share of the economy. In an austere fiscal environment, however, spending a dollar to stimulate SE is likely to have greater returns as opposed to stimulating WS employment, assuming the costs of adding one SE and one WS job are comparable.

Keywords: Self-employment; Entrepreneurship; Employment growth; Urban-rural hierarchy (search for similar items in EconPapers)
JEL-codes: J21 O18 R11 R12 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Working Paper: Self-employment effects on regional growth: A bigger bang for a buck? (2016)
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DOI: 10.1007/s11187-018-9988-5

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