Abstract
This paper examines the dynamics of self-employment rates overall and by gender across the UK during the period 2004–2016. Specifically, using the panel convergence methodology suggested by Phillips and Sul (Econometrica 75:1771–1855, 2007) we investigate whether self-employment rates can be characterised by a process where all regions tend to the same equilibrium (global or full convergence) or, if not, whether there are one or more clusters of regions with the same equilibrium (convergence clubs). We find that there is no global regional convergence in total and gender-specific self-employment rates. However, two convergence clubs of regions with lower self-employment rates are found along with a group of non-convergent regions which have higher self-employment rates and somewhat higher rates of growth in self-employment. We also show that gender differences in convergence patterns across UK exist.
Highlights
Self-employment has become a prominent characteristic of industrialised economies
Using the panel convergence methodology suggested by Phillips and Sul (Econometrica 75:1771–1855, 2007) we investigate whether self-employment rates can be characterised by a process where all regions tend to the same equilibrium or, if not, whether there are one or more clusters of regions with the same equilibrium
Building on the findings presented by Georgellis and Wall (2000) and Fotopoulos and Storey (2017), we explore the extent to which regional self-employment rates change over time and the extent to which those rates align with growth rates of other regions
Summary
Self-employment has become a prominent characteristic of industrialised economies. Whilst entrepreneurial activity has grown over time across many economies, regional differences in self-employment rates and business start-ups have been identified Burke et al (2019) found that country-level investment in research and development influences not just self-employment, but the type of self-employment. Greater R&D spending was associated with greater levels of self-employed workers with their own employees and opportunity self-employment. Beugelsdijk and Noorderhaven (2004) find similar evidence for regional differences in entrepreneurial attitude, across 54 European regions, which they link to regional growth rates. Self-employment at European city level has been found to depend on city size, socio-economic conditions, the crime rate and location (Belitski and Korosteleva 2010)
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