Abstract
Inspired from the theory of division of labor, I test the hypothesis that self-employment rate declines with a greater density of the population. The motivation is the existence of a huge variation of population densities and a considerable difference in self-employment rates across US states and counties. Results show that a negative and statistically significant impact of population density is present. Hence, people who are located in less crowded areas are more likely to be self-employed. Considering the relatively low availability of good-matching jobs in smaller places, self-employment can be explained as a failure of the size of the market place.
Keywords
- Self-Employment Search this journal for Self-Employment (opens in a new tab)
- Entrepreneurship Search this journal for Entrepreneurship (opens in a new tab)
- Population Density Search this journal for Population Density (opens in a new tab)
- Specialization Search this journal for Specialization (opens in a new tab)
References
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Copyright (c) 2013 Hatice Karahan (Author)

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Keywords
- Self-Employment Search this journal for Self-Employment (opens in a new tab)
- Entrepreneurship Search this journal for Entrepreneurship (opens in a new tab)
- Population Density Search this journal for Population Density (opens in a new tab)
- Specialization Search this journal for Specialization (opens in a new tab)
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