Do regional self-employment rates converge in the UK? Empirical evidence using club-clustering algorithm

This paper examines the dynamics of self-employment rates overall and by gender across the UK during the period 2004-2016. Specifically, using the panel convergence methodology suggested by Phillips and Sul (2007) we investigate whether self-employment rates can be characterized by a process where all regions tend to the same equilibrium (global or full convergence) or , if not, whether there is one or more clusters of regions with the same equilibrium (convergence clubs). We find that there is no global regional convergence in total and gender specific self-employment rates. However, two convergence clubs of regions with lower self-employment rates are found along with a group of non-convergent regions which have higher self-employment rates and somewhat higher rates of growth in self-employment. We also show that that gender differences in convergence patterns across UK exist.