Self-employment duration in urban and rural locations

Mika Haapanen and Hannu Tervo

Applied Economics, 2009, vol. 41, issue 19, 2449-2461

Abstract: Previous research has shown that the local environment is important for self-employment. The dynamics of self-employment varies between areas characterized by different labour market conditions, entrepreneurial traditions and other structural factors. This article analyses self-employment spells in Finland with a large register-based data set from the period 1987 to 2002. The main aim is to investigate the role of region-specific factors as compared with individual-specific and other factors on the duration of self-employment spells. First, the descriptive analysis shows that the exit rates from self-employment and the length of self-employment spells depend upon location (urban versus rural area) and the cyclical trends in the economy. Second, self-employment duration is modelled using discrete time survival analysis. It is found that rural areas have significantly lower exit rates in the first years of self-employment than urban areas.

Date: 2009
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Working Paper: Self-employment duration in urban and rural locations (2005)
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DOI: 10.1080/00036840802360278

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