20 Pages Posted: 20 Dec 2011
Date Written: December 2011
Based on the notion that entrepreneurship is a ‘local event,’ the literature argues that self-employed workers and entrepreneurs are ‘rooted’ in place. This paper tests the ‘residential rootedness’-hypothesis of self-employment by examining for Germany and the UK whether the self-employed are less likely to move or migrate than employees. Using longitudinal data from the German Socio-economic Panel Study (SOEP) and the British Household Panel Survey (BHPS) and accounting for transitions in employment status we found little evidence that the self-employed in Germany and the UK are more rooted in place than employees. Firstly, the self-employed are not less likely to move or migrate over the period 2001-08. Secondly, those who are currently self-employed are also not more likely to have remained in the same place over a period of three years (2008-06 and 2005-03) as compared to those who are currently employed. Thirdly, those who are continuously self-employed are not less likely to have moved or migrated over a 3-period than those in continuous paid employment. Fourthly, in contrast to the prevalent ‘residential rootedness’-hypothesis in economic geography and regional studies, we found that the entry into and the exit from self-employment are associated with internal migration.
Keywords: self-employment, migration, residential mobility, rootedness hypothesis, UK, Germany
JEL Classification: D22, J61, J62, L26
Suggested Citation: Suggested Citation
Reuschke, Darja and van Ham, Maarten, Testing the ‘Residential Rootedness' - Hypothesis of Self-Employment for Germany and the UK (December 2011). SOEPpaper No. 413-2011. Available at SSRN: https://ssrn.com/abstract=1974892 or http://dx.doi.org/10.2139/ssrn.1974892