Propensity and motive behind the choice of Self-Employment: in rural and urban Sweden

Abstract: In Sweden and many other countries of the European Union throughout the entire twentieth century the self-employment has been important and essential for sustainable growth and welfare. The dynamics of self-employment have had an variance between areas that are characterized and distinguished by different labour market conditions, entrepreneurial traditions and other structural factors. In general, the agricultural importance in Swedish rural regions has declined over time, hence other small and medium industries have grown and gained more significance in these type of regions. A good example of the decline in industrialised importance for Swedish rural region is Bergslagen. Where the majority of the jobs in the traditional sectors of iron-ore mining were lost without any renewal. This study highlights the self-employment option out of the two-folded perspective. The first and foremost is to investigate the spatial i.e. rural-urban differences with the relation to individual motives as their choice for self-employment. Also, a second and as a side goal of the research, the propensity for self-employment is considered in order to get wider insight of the regional start-up activity in urban and rural regions. By using the rich survey dataset on ex-post motives and the register-based longitudinal data from Swedish Statistics (SCB). The regional differences in determinants for self-employment are examined by applying the binary probit and multinomial logit regressions. Additionally, in order to get a coherent unity within the multidimensional motives a factor analysis is used for grouping the motive variables into the four groups. Simultaneously for easier association to labour market the motives are also divided into typology of pull-push categories. The results regarding propensity for self-employment show small or no differences in the tendency for starting the own venture in rural side or urban regions. On the other hand, results concerning spatial aspects and motive behind the choice of occupation shows that a mutually pull and push reasons are more linked to the urban region than to the rural. Comparable results are observed on the subject of single ex-post motive “non-monetary” in respective area i.e. rural and urban.