Guy Baudelle (p), Gerhard Krauss, Clément Marinos (p)

Peter Stenberg

See extended abstract

Mark Partridge (p), Alexandra Tsvetkova, Mike Betz

Guy Baudelle

Economic development policies often revolve around supporting small businesses and new firm creation as they are locally grown and likely can be more influenced by state and local policy. Two prominent strands of current research—the regional economic growth and small business/entrepreneurship literatures—elucidate the importance of small, young firms for regional economic performance and the crucial role urban-rural proximity plays in the distribution of growth across space. Keeping these two research traditions in mind, we study the effects of self-employment on job growth in US counties. Our goal is to estimate the net employment spillovers from changes in self-employment (SE) and to compare them to spillovers from changes in wage and salary employment (WS). We ask the following research questions: Do exogenous net changes (shocks) in SE spur larger or smaller changes in employment than do equal changes in WS employment and do these effects vary across the rural-urban hierarchy? The answers to these questions are of paramount importance in devising economic development strategy across urban and rural settings. We use a differencing strategy and an exogenous measure of SE and WS employment shocks to estimate net multiplier effects and to investigate their relationship with proximity to differing-sized urban centers. The analysis uses US county-level data spanning the 2001-2013 period. The results confirm the importance of self-employment for job creation, supporting both more SE and WS employment. Distance from urban centers generally offers protection that promotes SE growth but hinders WS employment growth. In an austere fiscal environment, spending a dollar to stimulate SE is likely to have greater returns as opposed to stimulating WS employment.

Peter Stenberg (p)

Mark Partridge

Abstract: With the growing use of the Internet for information, education, job hunting, and other activities, its economic value increases. The incidence of in-home Internet subscriptions, however, varies meaningfully across households, with poorer households less likely to purchase the Internet than rich households; rural households less likely than urban households; and Native American households less likely than other households. The lack of universality has, potentially, enormous consequences for households not subscribing to the Internet. Using logistic regressions and an Oaxaca-Blinder decomposition we find that while economic benefits exist from Internet use, cost remains a major inhibiting factor for Native American households purchasing the service while tribal locations, on average, may present a greater challenge vis-à-vis other rural locations.