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The Economic Impacts of Self-Employment

Published online by Cambridge University Press:  26 January 2015

Stephan J. Goetz
Affiliation:
Northeast Regional Center for Rural Development, Pennsylvania State University, University Park, Pennsylvania
David A. Fleming
Affiliation:
Northeast Regional Center for Rural Development, Pennsylvania State University, University Park, Pennsylvania
Anil Rupasingha
Affiliation:
Federal Reserve Bank of Atlanta, Atlanta, Georgia
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Abstract

Even as self-employment continues to increase, policymakers remain largely unaware of this trend and fail to see it as an opportunity for addressing enduring joblessness. In part, this is explained by limited data on the self-employed and by widespread perceptions that returns to self-employment are low; that the self-employed are merely patching together piecemeal work opportunities requiring limited skills; and that there are no local economic impacts or spillover benefits into other sectors. Contrary to these perceptions, recent studies suggest that self-employment has tangible positive economic impacts not only on wage and salary employment but also on per capita income growth and poverty reduction. This article synthesizes the pertinent emerging literature and assesses dynamics of the lags involved between self-employment shocks and subsequent employment growth.

Type
Invited Paper Sessions
Copyright
Copyright © Southern Agricultural Economics Association 2012

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