LSE LSE Research Laboratory LSE
LSE Research Laboratory (RLAB)

Abstract for:

Does Self-Employment Measure Entrepreneurship? Evidence from Great Britain

Giulia  Faggio,  Olmo  Silva,  May 2012
Paper No' SERCDP0109: | Full paper (pdf)
Save Reference as: BibTeX BibTeX File | Endote EndNote Import File
Keywords: Entrepreneurship; self-employment; spatial distribution

JEL Classification: L26; J21; R12; R23

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
Share this page: Google Bookmarks Google Bookmarks | Facebook Facebook | Twitter Twitter


Research on entrepreneurship often uses information on self-employment to proxy for business creation and innovative behaviour. However, little evidence has been collected on the link between these measures. In this paper, we use data from the UK Labour Force Survey (LFS) combined with data from the Business Structure Database (BSD), and the Community Innovation Survey (CIS) to study the relation between self-employment, business creation and innovation. In order to do so, we aggregate individual and firm-level data at the Travel-to-Work Area (TTWA) and investigate how the incidence of self-employment correlates with the density of business start-ups and innovative firms. Our results show that in urban areas a higher incidence of self-employment positively and strongly correlates with more business creation and innovation, but this is not true for rural areas. Further analysis suggests that this urban/rural divide is related to lack of employment opportunities in rural areas, which might push some workers into self-employment as a last resort option.

This paper has been published as:
Self-Employment and Entrepreneurship in Urban and Rural Labour Markets, Giulia Faggio and Olmo Silva, Journal of Urban Economics, Volume 83, Issue 1, November 2014