AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
The Declining Local Bias of Entrepreneurship in the United States
AEA Papers and Proceedings
(pp. 241–245)
Abstract
Multiple studies document a local bias of entrepreneurship (LBE) in recent decades, where self-employed entrepreneurs are systematically more likely than wage workers to operate in their region of birth. This paper documents an important new fact: The LBE has been declining in the United States since 1970. The LBE is still present for white men engaged in self-employment, but it no longer exists for the overall US-born workforce. We connect that decline to the transformation of self-employment away from high startup capital sectors and the reduced opportunity for local self-employed entrepreneurs to achieve high incomes compared to wage work.Citation
Colaiacovo, Innessa, Margaret Dalton, Sari Pekkala Kerr, and William R. Kerr. 2026. "The Declining Local Bias of Entrepreneurship in the United States." AEA Papers and Proceedings 116: 241–245. DOI: 10.1257/pandp.20261003Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- J23 Labor Demand
- L26 Entrepreneurship
- M13 New Firms; Startups