Using decomposition analysis, the paper investigates why Northern England has
fewer but higher performing self-employed individuals than the South. We find
the causes are mainly structural differences rather than regional variation in
individual characteristics. There are more self employed individuals in the
South, but on average they create fewer jobs. Post compulsory education has a
strong negative effect on the probability of self employment in the South,
probably due to better employment opportunities there, but little influence in
the North. Education has some positive effects on job creation by entrepreneurs
in both regions. Aggregate studies may thus give misleading results
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