Testing the 'residential rootedness' hypothesis of self-employment for Germany and the UK

Based on the notion that entrepreneurship is a 'local event', the literature argues that entrepreneurs are 'rooted' in place. This paper tests the 'residential rootedness' hypothesis of self-employment by examining for Germany and the UK whether the selfemployed are less likely to move over long distances (internal migration) than workers in paid employment. Using longitudinal data from the German Socio-Economic Panel Study (SOEP) and the British Household Panel Survey (BHPS), and accounting for transitions in employment status we found little evidence that the self-employed in Germany and the UK are more rooted in place than workers in paid employment. Generally speaking, the selfemployed were no less likely than workers in paid employment to migrate over longer distance. In contrast to the residential rootedness hypothesis we found that entry into selfemployment and female self-employment are associated with internal migration, and that the self-employed who work from home (home-based businesses) are fairly geographically mobile. The gendered results suggest that women might use self-employment as a strategy to be spatially mobile with their household, or as a strategy to stay in the workforce after having moved residence until they find a job in the more secure wage and salary sector.