Economic growth through entrepreneurship: Determinants of self-employed income across regional economies

Knowledge of the determinants of self-employment income is critical to entrepreneurial development strategies if the development goal is to increase incomes not just employment. Using American Community Survey data, unconditional quantile regression is used to investigate differences in the relationship between entrepreneurial income and an array of individual, industry, and regional characteristics across the self-employment income distribution. Personal attributes, such as education, race, age, and gender, both explain differences in self-employment income and vary in importance across the income distribution. Regional agglomerative effects are significantly positive and stronger at the upper end of the self-employed income distribution.     

Attributes influencing self-employment propensity in urban and rural Sweden

Policies aiming at promoting entrepreneurship are in general formed on national levels, without any consideration of differences between urban and rural areas. Usually, cities are provided with better and more modern infrastructure; cities have better supply of physical, financial and human capital, and connected services, and cities have a more modern industrial structure in the sense that their shares of growing industry are higher. Thus, it is possible that policies for entrepreneurship, which in general are designed for urban areas, might be less effective when they are implemented in rural areas. A first step to test the validity of this hypothesis could be to investigate the differences between cities and countryside regarding self-employment propensity and factors affecting the choice to become self-employed. Based on an exceptionally rich data set containing very detailed socio-economic and geographical information on all residents in Sweden, this paper examines: (a) the scope and structure of self-employment propensity in urban and rural areas, respectively, in Sweden, divided into full-time and part-time self-employment, and (b) the importance of a number of attributes that may have an impact on individuals’ propensity to start an enterprise in the two area types. Variables being tested are connected to demography and education, labor market status, plant characteristics, self-employment experience, financial resources, family links and regional attributes. The main results indicate that self-employment entry is influenced by the same factors in the same way in urban and rural areas. However, countryside’s industrial structure has a smaller share of growing industries. The fact that countryside’s startups follow the existing industrial structure means that this “modernity gap” between densely built up areas and countryside remains. From a policy perspective, this must be seen as a serious problem for countryside’s growth potential. This gives an argument for designing a special entrepreneurship policy for the countryside in order to increase its share of growing trades and thereby modernize its industrial structure.     

What explains unemployment in US–Mexican border cities?

The unemployment rate of US–Mexico border cities has stood remarkably higher than the US average. Using annual data from 1990 to 2005, we contrast large border MSAs (Brownsville, McAllen, Laredo, and El Paso in Texas and El Centro in California) to a panel of MSAs in the same states (Austin, Dallas, Houston, San Antonio, Los Angeles and San Francisco). Focusing on the industry composition of employment and population growth, we report several panel data results confirmed by error correction adjustment. First, the national unemployment rate does not help explain the local border cities unemployment but does so for the panel of large MSAs. Second, the relative employment indices have statistically significant effects only for the border panel: increases in employment concentration within an industry lead to higher local border unemployment. Third, higher population density lowers unemployment for border cities. Two anonymous referees of this journal provided useful comments on a first draft. The usual disclaimer applies.     

The commuting behaviour of self-employed workers: Evidence for Spain

The aim of the paper is to examine the commuting behaviour of self-employed workers in Spain as well as its relationship with satisfaction with jobs and housing. According to our results although conventional estimations indicate that commuting trips are shorter among the self-employed, the differences with employees vanish when the potential endogeneity of self-employment is controlled for. We also show that the job and housing satisfaction levels of the self-employed are less sensitive to commuting than those of employees, and that in fact no significant effect is observed for relevant segments of the former group, what gives partial support to the theoretical model that we propose where imperfect information problems affect the employees but not the self-employed.     

WORKPLACE RESTRUCTURING AND URBAN FORM: THE CHANGING NATIONAL SETTLEMENT PATTERNS OF THE CANADIAN WORKFORCE

ABSTRACT:  This article examines the relationship between emerging work arrangements and national settlement patterns. While growth is centralized in large cities, social commentators continue to suggest that workplace restructuring—facilitated by technological progress—encourages more dispersed settlement patterns, evoking concern about the environmental sustainability of the trend. Multivariate analysis using Canadian census data shows that with the exception of self-employed professionals, the home workers, and self-employed in nonmanual occupations have a lower tendency to reside in large cities than otherwise similar wage and salary earning commuters. However, household mobility and temporal trends suggest that workplace restructuring is not dispersing workers away from large cities by inducing mobility, but that take-up is higher in more remote areas. It is argued that workplace restructuring permits more dispersed national settlement patterns than if workers needed to move to large cities for proximity to employment growth. The article reflects on the implications of the findings for urban sustainability policies that promote compact urban forms and the policies that emphasize consumption amenities of cities to attract mobile workers.     

Mexican northern border municipalities, financial dependence and institutions

Mexican northern border municipalities have experienced economic and populational growth rates that are much higher than other Mexican regions resulting in higher demand for public services and infrastructure. The different institutional framework, both fiscal and legal, faced by municipalities in every Mexican State might impact the fiscal behavior of local governments. This article examines whether border municipalities are more financially dependent on central authorities due to the high demand for public services in their jurisdictions and their inability to obtain sufficient funding. Several econometric models are estimated for 300 Mexican municipalities in the year 2000. A strong and negative relationship between income and financial dependence is found, as expected. We also learned that institutional and regional factors should not be omitted in the model specifications. Statistical theory based on the estimations shows that the border municipalities of Ciudad Juárez and Puerto Peñasco have systematically lower financial dependence than others. However, there is no general rule regarding border municipalities and financial dependence.     

Smart cities and attracting knowledge workers: Which cities attract highly‐educated workers in the 21st century?

Regional policy‐makers have long sought to attract highly‐educated workers with a view to stimulating economic growth and vibrancy. Previous studies over the decades leading up to the new millennium show human capital divergence across cities, where the share of college graduates grew faster in cities that had larger initial shares of college‐educated workers. However, labour markets have changed significantly post‐2000, likely affecting migration decisions of highly‐skilled workers. Additionally, past studies have not controlled for important changes in industry education levels and overall industry composition that may influence city‐level college graduate growth. We use detailed 4‐digit NAICS industry employment data combined with public micro‐data to construct measures of industry skill upgrading and changes in industry composition to control for their effects on human capital growth. We find agglomeration forces, rather than initial graduate share, explains college‐graduate share growth post‐2000. We also decompose graduates into bachelors and postgraduate degree holders to determine whether different forces are at play on growth of graduates at different education levels.     

Inter-generational Occupational Mobility Amongst Blacks in the Mitchell’s Plain Magisterial District, Cape Town: Evidence from the Khayelitsha/Mitchell’s Plain Survey

This study examines inter-generational occupational class mobility amongst blacks (Africans and coloureds) in the Mitchell’s Plain Magisterial District in Cape Town, South Africa. The results of the Khayelitsha/Mitchell’s Plain Survey conducted in 2000 serve as the main source of data. We show that middle-class occupational origins do not necessarily guarantee the transmission of advantage from one generation to the next. The findings revealed that there is a churning effect at work with respondents experiencing upward occupational class mobility due to the changing occupational structure, which at the same time is counteracted by considerable downward occupational class mobility. This result is partly due to (1) the particular class structure of the Mitchell’s Plain Magisterial District, which excludes many middle-class black areas and therefore has a more working-class character and (2) the precarious character of the black middle class, which is concentrated in low-paid nursing and teaching occupations.

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EMPLOYMENT CONCENTRATION AND JOB QUALITY FOR LOW‐SKILLED LATINO IMMIGRANTS

ABSTRACT: This article examines the formation, determination, and quality of employment concentration for low‐skilled Latino immigrants. Comparative evidence is drawn from the three metropolitan areas of Chicago, Los Angeles, and Washington, DC. Using 2000 Public Use Microdata Sample (PUMS), gender‐specific ethnic niches where Latino immigrants disproportionately concentrate are identified and niche effects on wage earnings are analyzed. This study finds that while ethnic niches are evident in all three cities, they are most prevalent among women and newly arrived immigrants, and in the emerging gateway of Washington, D.C. Niche employment is almost uniformly characterized by earnings disadvantage as compared to non‐niche employment, with lower returns premium on workers’ human capital and work experience, especially for men. Niche effects on earnings vary across metropolitan areas in accordance with their economic structure as well as with the size and profile of immigrants.     

Regional density functions and growth patterns in major plains of China, 1982–1990

This research analyzes the spatial patterns of regional development in China through the change of population density functions from 1982 to 1990, using several online digital data sets. To minimize the influence of physical environment on population densities, the study areas are limited to four major plains of China: the Northeast (Dongbei), North China (Huabei) and Hubei-Hunan (Lianghu) Plains, and the Sichuan Basin. A gravity-based delineation approach is used to delineate the influen ce regions of 17 cities. Regional densities in China decline with distance from a city, similar to western countries. In addition, areas close to central cities grew faster than remote areas, described as a trend of centralization. However, regions with strong core growth are generally associated with stagnant hinterlands (‘core growth-hinterland stagnation’); and regions with moderate core growth are usually matched by similar growth rates in the hinterlands (‘spread through growth’ ). Received: 8 March, 2000 / Accepted: 5 September 2000     

Local labor markets in U.S.–Mexican border cities and the impact of maquiladora production

Shift-share decompositions of employment positions created over 1990–2002 at U.S.–Mexico border cities show that El Paso employment change has been overwhelmingly attributed to national forces, while local and national forces roughly match employment creation at Brownsville. With such fast growing U.S.–Mexico border area as background, we implement time series labor demand models to these cities (El Paso and Brownsville) and compare movements in Mexican maquiladora production against U.S. employment and wages. Cointegration methods confirm that local shocks are more important in Brownsville than in El Paso. Specifically, 10% increases in Juárez maquiladora production lead to increases of 1.21% in El Paso’s government employment and of 0.88% in overall employment. Similar increases in Matamoros lead to gains of 1.59% in Brownsville’s trade, transportation and utilities employment and of 1.41% in overall employment. These results support shift-share findings and are generally consistent with a more diversified industry-mix promoting higher employment creation.

Age articulation of U.S. inter-metropolitan migration flows

A fundamental divide in migration research has existed between aggregate studies of movement among geographic regions and micro studies of individual migrant behavior. Micro-scale studies have highlighted the importance of stage of life-cycle in predicting movement propensities, whereas many aggregate studies have focused on age-aggregated data summed over all origins for in-migration and over all destinations for out-migration. In this paper we show that if data for functional metropolitan-centered regions are employed, and if origin-destination specific streams of movement are analyzed, the age-specific patterns of inter-metropolitan migration within the United States cluster into distinctive patterns of flow representative of key stages of the life-course. In order to expose and portray a rich, age-articulated geography of U.S. migration we aggregate county-to-county migration flow data from the 1990 census for extended metropolitan regions: Bureau of Economic Analysis (BEA) Economic Areas. We calculate destination-specific out-migration rates broken down into 17 age groups for each origin-destination-specific migration stream between pairs of Economic Areas and present the results of a factor analysis of these flow-specific age profiles. We use the factor scores to cluster the very large number of origin-destination-specific age profiles and find that seven characteristic types emerge reflecting key mobility stages of the life course. We analyze the distinctive characteristics of the migration flows in each cluster and based on the prevalence of flows of each type within streams of gross in- and gross out-migration we present a typology of the 172 BEA Economic Areas. Our conclusion is that better understanding the age articulation of origin-destination-specific flow patterns would help advance regional science migration research. Received: January 2001/Accepted: June 2002 Earlier versions of this paper were presented at the 47^th North American Meetings of the Regional Science Association International, Chicago, Illinois, USA, November 9–12, 2000 and at the 12^th International Symposium Hosted by the Executive Secretariat of the Pacific Regional Science Conference Organization, Tokyo, Japan, October 1–3, 2000. The authors thank Joseph Persky, Roger Bolton, Hiroyuki Shibusawa, and Roger Stough for helpful suggestions made at those two presentations. The authors gratefully acknowledge the expert computer programming assistance of Lucy M. Carruthers of the Center for Computing and Information Technology of the University of Arizona. We also thank Chris Henrie, Ph.D. student, University of Arizona, for constructing our base map of BEA Economic Areas. Frank Heins would like to thank the National Research Council of Italy (Short-term Mobility Program 1999) for financially supporting a stay at the Department of Geography and Regional Development, University of Arizona. During his stay the groundwork for this research was laid. David Plane would like to acknowledge the support of the Population Division, U.S. Census Bureau for his 2001–2002 academic year visiting research position during which the final analyses and revisions were made.     

Growth and change in U.S. micropolitan areas

The U.S. Census Bureau has now recognized micropolitan places, which are sometimes called emerging metropolitan areas or mini-metros. After the 1990 census, a total of 581 different non-metropolitan counties, forming 496 consolidated micropolitan areas, were assigned to this new settlement category. The first half of the paper analyzes the evolving geographic distribution and the shifting employment attributes (emphasizing job specialization) of these places during 1980–2000. Changes in the U.S. micropolitan landscape, reflecting the impressive growth of these places during the late 20th century, mirror other well-known national demographic and economic trends. The second half of the paper analyzes simultaneous population and employment change in micropolitan counties, using a series of partial adjustment models that control for various demographic, economic, and geographic factors. Evidently (initial and adjusted) population levels have induced both employment and population change in these places, but employment levels have failed to have the same impact.

Examining the role of amenities in migration decisions: A structural estimation approach

I develop a discrete choice dynamic migration model to examine the importance of amenity values in immigrants' migration decisions. The model accounts for differentials in both wages and location‐specific amenities as determinants of migration decisions, and the size of migrants' networks is allowed to influence the value of the US location choice as well. By estimating the model using panel data from the Mexican Migration Project, I find that Mexican migrants place substantial value on amenities in the United States, which are shown to fall precipitously with migrants' age. Simulation results from policy experiments indicate that Mexican immigrants are more responsive to a policy that reduces the amenity values related to unauthorized US residence than to an increase in the number of border patrol officers.     

Job search success and employability in local labor markets

This paper considers the relationship between an unemployed person’s employability and job search success. Using a broad employability framework (covering individual, personal and external demand, and other factors) the paper considers a range of demand and supply factors, that were generally identified in applied and theoretical literature, that influence success in getting employment. The model is then used to consider the competing efficient metropolitan labor market and the local labor demand hypotheses in terms of the importance for this sample of skills mismatch and spatial mismatch. The findings suggest that professional qualifications, “soft” verbal skills and using speculative applications to employers were significantly associated with job search success. Length of unemployment, age, and having last worked in a manual occupation were negatively associated with job success, the latter decreasing the odds of getting a job to around thirty percent, suggesting difficulties in occupational “switching” for many job seekers. Higher academic qualifications were also significantly negative, as were those claiming that promotion chances will influence their reservation wage. The geographic accessibility to local jobs was significantly and positively associated with job search success. The results suggest that a range of employability factors and both skills mismatch and spatial mismatch are important in explaining job search success. The degree of “skills” or “spatial” mismatch in a local labor market will be contingent upon the characteristics of the local economy, employers, job seekers and the jobs being considered.

Evaluating cities' vitality and identifying ghost cities in China with emerging geographical data

With the rapid urbanization of China, plenty of new urban lands have been developed with the great expectation to deal with all kinds of issues in old urban areas such as high population density, great demand on limited land resources, and decaying environment. However, a great proportion of vacancy in these newly developed units leads to the undesired observation of ghost cities. Lacking of clear and effectively evaluation criterion, the understanding of ghost cities in China is then rather limited. Considering the fact of ghost cities, we borrow the theory of urban vitality to identify and evaluate ghost cities in this paper. We argue that ghost cities are associated with very low urban vitality. In the light of big/open data, we are able to profile ghost cities of China based on 535,523 recent project-level residential developments from 2002 to 2013. We use the national-wide and million magnitude road junctions, points of interest and location based service records of 2014/2015 for measuring the morphological, functional and social vitality of each residential project. We then aggregate the project level evaluation results into the city level and thirty ghost cities are then identified by comparing the residential projects' vitality in the old (developed before or in 2000) and new (developed after 2000) urban areas in each city. Our profiling results illustrate the big picture of China's past residential developments, and then of ghost cities. We find the average vitality of residential projects in new urban areas is only 8.8% of that in old urban areas, denoting the potential existence of ghost cities in newly developed areas in Chinese cities. We have also benchmarked our identified ghost cities with existing rankings, the Baidu searching engine and night-time light images. Although we admit that ghost cities may exist in the particular urbanizing phase of China and that some ghost cities now may be well developed in the future, this study provides a thorough evaluation on the ghost city condition in China. This may shed light on policy implications for Chinese urban development.     

What makes a region entrepreneurial? Evidence from Britain

There is a great deal of variation in the levels of entrepreneurship, or rates of self-employment, across the regions of Britain. Over the period 1983–1995, average self-employment in the North, Scotland, and the West Midlands was respectively 25%, 15%, and 15% lower than the national average, whereas in the South West, East Anglia, and Wales it was respectively 28%, 23%, and 21% higher. We develop a theoretical model of regional self-employment, and estimate the roles of labour market conditions, labour force characteristics, industry composition, and region-specific factors such as entrepreneurial human capital. Our results suggest that all of these factors are important, and that regional heterogeneity and regionally correlated disturbances must be accounted for when estimating regional self-employment relationships. Received: November 1998 / Accepted: July 1999     

Planning for Mixed Use: Affordable for Whom?

Problem, research strategy, and findings: Mixed-use zoning is widely advocated to increase density; promote active transportation; encourage economic development; and create lively, diverse neighborhoods. We know little, however, about whether mixed-use developments affect housing affordability. We question the impact of mixed-use zoning on housing affordability in Toronto (Canada) between 1991 and 2006 in the face of waning government support for affordable housing and increasing income inequality due to the occupational restructuring accompanying a shift to a knowledge-based economy. We fi nd that housing in mixed-use zones remained less affordable than housing in the rest of the city and in the metropolitan region. High-income service occupations experienced improved affordability while lower wage service, trade, and manufacturing occupations experienced stagnant or worsening affordability. Housing in mixed-use zones is increasingly affordable only to workers already able to pay higher housing costs. Our findings are limited to Canada's largest city but have lessons for large North American cities with similar urban economies and housing markets.

Takeaway for practice: Mixed-use developments may reduce housing affordability in core areas and inadvertently reinforce the sociospatial inequality resulting from occupational polarization unless supported by appropriate affordable housing policies. Planners should consider a range of policy measures to offset the unintentional outcomes of mixed-use developments and ensure affordability within mixed-use zones: inclusionary zoning, density bonuses linked to affordable housing, affordable housing trusts, and other relevant methods.     

Regional business cycle integration along the US–Mexico border

Because of the growing internationalization of the US economy, a literature has developed on the impacts of globalization on US industries and regions. In this paper we look at four MSAs that have a long history of integration with Mexico and test how their overall business cycles are connected to those of the broader economies that surround them. As globalization increases in the US, the lessons learned from these MSAs can be useful for cities trying to understand how globalization may impact them in the future. Results suggest that the border MSAs are significantly integrated with the broader economies that surround them but that the integration varies based on the structure of the local economy. Border MSAs that have large retail sectors that sell to Mexican nationals are more integrated with the Mexican economy, while El Paso, which has a close relationship with the maquiladora sector in Juarez, is more integrated with the US and Texas economies.     

Explaining the pattern of regional unemployment: The case of the Midi-Pyrénées region

Unemployment rates vary widely at the sub-regional level. We seek to explain why such variation occurs, using data for 174 districts in the Midi-Pyrénées region of France for 1990–1991. A set of explanatory variables is derived from theory and the voluminous literature. The best model includes a correction for spatially autocorrelated errors. Unemployment rates are higher in urban areas and, where per capita income is higher, are consistent with the view that unemployment differences largely reflect variations in “amenities.” Along with a lack of evidence of housing market rigidities, these suggest that subregional variations in unemployment are not mainly the result of labor market disequilibrium. Received: 9 July 1999 / Accepted: 30 October 2001