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Labour market behaviour and migration: a cross-national comparison of the relationship between occupational and geographical mobility in late-modern societies

Final Report Summary - MOBILITY (Labour market behaviour and migration: a cross-national comparison of the relationship between occupational and geographical mobility in late-modern societies)

The project investigates the link between the individuals' labour market behaviour and the geographical mobility behaviour over time. More specifically, it explores how self-employment including a switch into and an exit from self-employment is linked to moves. The main objective is to add to the understanding of the labour-market behaviour of people and households and to shed new light onto the place embeddedness of self-employment. Thus, there are several beneficiaries of this project: policy-makers at different geographical scales (city, region, national) who are engaged in employment policy and policy for small businesses, the business community, the self-employed, key stakeholders in economic development on local and regional level and the wider public.

The starting point of this research was the surprisingly little knowledge about how individuals' self-employment decisions (i.e. labour market behaviour) are connected to their geographical-mobility decisions. Moreover, previous research mainly asks people in a certain country or region about their 'current' employment and place of residence and thus falls short to consider changes in people's employment and local residence.

Entrepreneurship is considered in the literature as a 'local' event. This includes the belief that individual entrepreneurs are strongly 'rooted' in their place of residence. Most research, however, is focused on firms and firm formation rather than individual entrepreneurs, and there is only little empirical evidence about the causality between self-employment and residential rootedness. This is, however, crucial for understanding the dynamics of self-employment and its local embeddedness. Specifically, people who are more rooted in place could be more likely to start up a business. On the contrary, self-employment might make people 'stuck' in place. This highlights the importance of this research, for example, for government schemes to promote self-employment.

This project challenges the predominant view in the literature concerning the connections between self-employment and moves. The investigation of interregional moves and individuals' subsequent employment status consists of three parts. Firstly, the study explores the geographical mobility behaviour of self-employed entrepreneurs in Germany, as compared to employees. Using large-scale panel data covering the years 1996 - 2009 from the socio-economic panel study (SOEP), it examines whether self-employed entrepreneurs are 'rooted' in place and also whether those who are more rooted in place are more likely to enter self-employment. The main findings of the first part of the project are that self-employed entrepreneurs as compared to employees are not more 'rooted' in their place of residence and that those who are more rooted in their place of residence are not more likely to become self-employed. Moreover, in contrast to expectations drawn from previous literature, flows into self-employment are positively associated with interregional moves. The second part of the project adds to the first part a cross-country perspective. It tests the residential rootedness-hypothesis of self-employment for Germany and the United Kingdom. Precisely, it explores whether the self-employed are less likely to move or migrate than employees. By choosing countries with different mobility regimes in terms of both geographical mobility and job mobility, the present cross-country analysis intends to provide more general findings on individuals' job-related geographical mobility behaviour. Using longitudinal data from the SOEP and the British household panel survey (BHPS) it founds in confirmation with the first part of the project little evidence that the self-employed in Germany and the United Kingdom are more rooted in place than employees. More specifically, the main findings of the second part of the project are that the self-employed are not less likely to move or migrate over the period of 2001. Moreover, those who are currently self-employed are also not more likely to have remained in the same place over a period of three years (2005 - 2008) as compared to those who are currently employed, and those who are continuously self-employed are not less likely to have moved or migrated over a three-year period than those in continuous paid employment. Finally, in contrast to the prevalent 'residential rootedness' hypothesis in economic geography and regional studies, it founds that the entry into and the exit from self-employment are associated with internal migration.

The third part of the project deals with Fielding's escalator region hypothesis (ERH) on South East England (1989, 1992). It examines whether the South East of England exports its 'entrepreneurial culture' and whether it gains entrepreneurial resources through internal migration using the BHPS 1991 - 2008. This research advances the ERH in a number of respects. It is the first to use longitudinal data since Fielding's original work. Secondly, it explores in depth the role of self-employment in moving on and off the 'escalator'. Thirdly, it uses annual rather than decennial change. Finally, it uses data that cover the whole of the United Kingdom instead of just England and Wales. The main findings of the third part of the project show that, consistent with the ERH, the region does indeed export entrepreneurs. However, importantly, out-migrants from the South East are substantially more likely to subsequently exit self-employment relative to other United-Kingdom internal migrants. Furthermore, despite its economic functions, the South East is no more likely to attract (would-be) self-employed entrepreneurs through internal migration than other regions. These findings call into question to what extent the South East acts as an 'escalator' in terms of attracting, producing and exporting entrepreneurial 'alumni'.

Overall, the research demonstrates that a life-course perspective needs to be integrated in the analysis of individual's employment decisions and, more particularly, the geography of self-employment. It concludes that a longitudinal perspective on individual employment careers provides an important methodological advance. In addition, it emphasises the importance of mobility and immobility and individual and household constraints and preferences for understanding who becomes self-employed.

To conclude, the main achievements and socio-economic impacts of this study are:

- It integrates perspectives on the linked issues of migration and entrepreneurship, which are mostly examined separately in previous research.
- Most existing studies explore entrepreneurship and self-employment only in relation to the place / regional environment in which business founders and entrepreneurs currently reside. The novel linkage between self-employment and residential moves over time this study offers will provide an empirical basis for a 'new dialogue on spaces of entrepreneurship' that recent literature has called for.
- Exploring transitions in employment status as a certain type of job mobility the study adds to migration literature a dynamic point of view which is crucial for understanding internal migration flows.
- It has the potential to advance both the migration and the entrepreneurship research with respect to theory and methodology.