Full Citation
Title: Entrepreneurship and the fight against poverty in US cities
Citation Type: Journal Article
Publication Year: 2021
ISBN:
ISSN: 0308-518X
DOI: 10.1177/0308518X20924422
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PMCID:
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Abstract: Entrepreneurship is often seen as the cure-all solution for poverty reduction. Proponents argue that it leads to job creation, higher incomes and lower poverty rates in the cities in which it occurs. Others argue that many entrepreneurs are actually creating low-productivity firms serving local markets. Yet, despite this debate, little research has considered the impact of entrepreneurship on poverty in cities. This paper addresses this gap using a panel of US cities for the period between 2005 and 2015. We hypothesize that the impact of entrepreneurship will depend on whether it is in tradeable sectors, so likely to have positive local multiplier effects, or non-tradeable sectors, which may saturate local markets. We find that entrepreneurship in tradeables reduces poverty and increases incomes for non-entrepreneurs, a result we confirm using an instrumental variable approach, taking the inheritance of entrepreneurial traits as the instruments. In contrast, while there are some economic benefits from non-tradeable entrepreneurship, we find these are not large enough to reduce poverty.
Url: http://journals.sagepub.com/doi/10.1177/0308518X20924422
User Submitted?: No
Authors: Lee, Neil; Rodríguez-Pose, Andrés
Periodical (Full): Environment and Planning A: Economy and Space
Issue: 1
Volume: 53
Pages: 31-52
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Other, Poverty and Welfare
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