Proprietorship formations and U.S. job growth

Abstract

Despite the surging interest in entrepreneurship as an economic development strategy, studies of the independent relationship between proprietorship formations and job growth are virtually non-existent. We find that self-employment or proprietorship rates are associated with faster job growth in the wage-and-salary sector, and the effect is statistically significant. The relative magnitude of this effect varies with the business cycle, being stronger during economic expansions and weaker during contractions. Further, the effect is stronger in metropolitan than in non-metropolitan counties.