Self-employment duration in urban and rural locations

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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.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840802360278

Affiliations: School of Business and Economics, University of Jyvaskyla, FIN-40014 Jyvaskyla, Finland

Publication date: August 1, 2009

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