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Erschienen in: The Annals of Regional Science 3/2022

20.04.2022 | Special Issue Paper

Digital exposure, age, and entrepreneurship

verfasst von: Ting Zhang, Roger Stough, Dan Gerlowski

Erschienen in: The Annals of Regional Science | Ausgabe 3/2022

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Abstract

This study focuses on age and digital exposure as factors driving individuals to be (1) employees or entrepreneurs, (2) full-time or part-time, or (3) opportunity or necessity entrepreneurs. It extends occupational choice models, relying on a utility maximization framework, to entrepreneur types incorporating age and digital exposure effects. Using 132 months of Current Population Survey data and multilevel modelling with individuals’ fixed effects and metropolitan area random effects, the study finds that (1) workers with low- and high- digital exposure are more likely to become entrepreneurs than peers with medium digital exposure, mirroring digitization’s “push” and “pull” mechanisms on entrepreneurship; (2) age strengthens digitization’s “pull” mechanism to be entrepreneurs (versus employees) and opportunity (versus necessity) entrepreneurs; (3) digital exposure has a weak marginal potential to increase workers’ odds to be part-time (versus full-time) entrepreneurs. The study also notes the importance of location and concludes with discussion and implications.

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Fußnoten
1
According to the 2020 U.S. Census, 17% of the US population was over 65 years; projected to be 21% in 2030. Bureau of Labour Statistics data indicate that the share of the labour force aged 55 or over is expected to increase from 23.4% in 2019 to 25.2% in.2029.
 
2
Using Health and Retirement Study data.
 
3
The data source is the Current Population Survey.
 
4
See the Integrated Public Use Microdata Series, https://​cps.​ipums.​org/​cps/​.
 
6
We defined opportunity versus necessity entrepreneurs based on three survey questions in the CPS: (1) whether a respondent was self-employed, was an employee in private industry or the public sector, was in the armed forces, or worked without pay in a family business or farm; (2) whether persons were part of the labour force—working or seeking work—and, if so, whether they were currently unemployed; and (3) why respondents were unemployed—either actively seeking work or on temporary layoff from a job—during the previous week.
 
7
For example, individuals who are interviewed in January, February, March, and April of one year are interviewed again in the next January, February, March, and April.
 
8
Considering the fact that the local economic condition might have spatial influence or autocorrelation from contiguous local areas’ economic conditions, as addressed in Santarelli et al. (2009), spatial econometrics were initially considered. However, for five reasons we did not think it necessary in this study: (1) we adopted multilevel modelling at metropolitan area level and individual levels in the study already; (2) we controlled for local unemployment rates and central city status to capture local socioeconomic influence; (3) our cluster-level unit is in metropolitan areas, which are not mostly contiguous geographically. Without contiguity, the spatial interdependence is limited. (2) A metropolitan area is a commuting circle in which residents and commuters share the urban centres and socioeconomic atmosphere, rather than sharing those in another metropolitan area some distance away. This differs from other geographic units that are arbitrarily determined by political (such as county) or population size boundaries (such as census blocks). (3) When facing a non-contiguous geographic unit, one needs to use a distance matrix to measure spatial associations that typically assume Euclidian distance between centroids of metropolitan areas. This hypothetical centroid approximation is not a good representation of the urban core, and the distance-based measure of influence from another metropolitan area is further compromised by size of the metropolitan areas. (4) Our basic unit of analysis is fixed at individual level and the majority of variation across our observations is at the individual level, not at a geographic area level, thus spatial interdependence is less of a concern.
 
9
Among others, including Evans and Leighton (1989), Kautonen et al. (2014), and Zissimopoulos and Karoly (2007).
 
10
According to Fairlie et al. (2016), the U.S. Census Bureau notes that the definitions of non-employers and self-employed business owners are not the same; although most self-employed business owners are non-employers, about a million self-employed business owners are classified as employer businesses.
 
11
Florida’s (2004) “creative class” occupations include sectors of management, business and financial operations, computer and mathematical, architecture and engineering, science, law, education, arts and media, health-care practitioners, and high-level sales management.
 
12
i.e. (a) whether a respondent was self-employed, was an employee in private industry or the public sector, was in the armed forces, or worked without pay in a family business or farm; (b) what type of industry in which the person performed his or her primary occupation; (c) what occupation in which the person worked.
 
13
That is self-employed in the knowledge-based sectors, based on answers from above CPS questions (a) through (c).
 
14
Based on answers from above CPS question (d).
 
15
Based on answers from above CPS questions (a) through (c).
 
16
CPS does not offer detailed information on an individual’s health status. Although Health and Retirement Studies offer detailed information on health, this dataset lacks information on monthly employment that is key to this study.
 
17
Those who did not report their educational attainment information or attained less than high school degrees were the omitted category.
 
18
Other race is the item omitted for comparisons with the above race dummy variables.
 
19
Being married is the item omitted for comparisons with the marital status dummy variables.
 
20
The better economic years including the pre-recession 2006 and 2007 and growth year 2016 are the omitted.
 
21
Please note that our definition of entrepreneurs is a subset of self-employment using the CPS data because our definition limits to knowledge-based non-agricultural self-employment.
 
22
Note we only study knowledge-based non-agricultural sector workers, including entrepreneurs.
 
23
As defined in Table 2.
 
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Metadaten
Titel
Digital exposure, age, and entrepreneurship
verfasst von
Ting Zhang
Roger Stough
Dan Gerlowski
Publikationsdatum
20.04.2022
Verlag
Springer Berlin Heidelberg
Erschienen in
The Annals of Regional Science / Ausgabe 3/2022
Print ISSN: 0570-1864
Elektronische ISSN: 1432-0592
DOI
https://doi.org/10.1007/s00168-022-01130-0

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