The Declining Local Bias of Entrepreneurship in the United States

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

No 35088, NBER Working Papers from National Bureau of Economic Research, Inc

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 U.S.-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: D24 G51 J11 J24 J62 L26 M13 R11 R13 (search for similar items in EconPapers)
Date: 2026-04
New Economics Papers: this item is included in nep-geo, nep-lma, nep-sbm and nep-uep
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