The tendency for business owners to start their companies in the town where they were born has effectively disappeared since 1970.
April 23, 2026
Original Paper
The Declining Local Bias of Entrepreneurship in the United States
SSRN · 6610731
The Takeaway
A long-standing rule of sociology held that entrepreneurs have a strong local bias that keeps them close to home. New data shows that this geographic connection has vanished for the modern American-born workforce. People no longer feel a unique economic tie to their birth region when deciding where to launch a career. Most experts assumed that local roots were the primary driver of regional economic development. This shift suggests that opportunity and mobility now matter more to entrepreneurs than their personal history or family location.
From the abstract
Multiple studies document a local bias of entrepreneurship (LBE) in recent decades, where self-employed entrepreneurs are systematically more likely than wage workers to operate in their region of birth. This paper documents an important new fact: the LBE has been declining in the United States since 1970. The LBE is still present for white men engaged in self-employment, but it no longer exists for the overall U.S.-born workforce. We connect that decline to the transformation of self-employment