Education and Regional Job Creation by the Self-Employed: The English North-South Divide

Using decomposition analysis, the paper investigates the reasons why Northern England has less but higher performing self-employed businesses than the South. It finds the causes are mainly structural differences rather than due to regional variation in people's characteristics. The paper also unearths a regional dimension behind the impact of education on entrepreneurial job creation. It finds that, in the less developed North, education boosts self-employment job creation by enhancing performance per venture (quality). In the South, it reduces it by having no effect on quality alongside a negative effect on the number of people who become self-employed (quantity).