Entrepreneurial and Employment Responses to Economic Conditions across the Rural-Urban Continuum

Abstract

In this article, we explore how local employment growth in the urban-rural continuum is affected by economic trends in industries that comprise local economies and by growth in nearby metropolitan areas. Our county-level analyses reveal heterogeneous responses. Favorable economic changes due to a fast-growing local industry mix have the largest positive impact on self-employment growth in small metropolitan areas and the smallest positive impact in rural counties. Self-employment in rural counties is fostered by growth in nearby small metropolitan statistical areas (MSAs) and is hampered by growth in nearby large MSAs. In micropolitan counties that are close to small and medium growing MSAs, local self-employment tends to grow faster, while growth in nearby large MSAs has no effect. In urban counties, growth in a nearby large MSA is not related to local self-employment growth in the lower tiers of the urban hierarchy.