The chart shows that self-employment in
Coastal Bend Self-Employment Dynamics
the oil and gas extraction industry today
has a concentration ratio more than ten
times (12.2) that of the national average.
ENTREPRENEURSHIP IN THE COASTAL BEND
The location quotients capture the current
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role of self-employment across industries.
Location Quotient and Shift Share Analysis
Some patterns of self-employment in the Coastal Bend appear
quite unique. According to the location quotients using the
U.S. as the benchmark, the following regional industries
stand out in terms of the relative role of self-employment:
Oil and gas extraction, construction, administration, and
accommodation and food services. Oil and gas extraction has
an exceptionally high location quotient of 12.2, meaning that
the share of self-employment is 12 times the share of selfemployment in that industry nationwide. Similarly, the location
quotient is 1.4 for construction, meaning that self-employment
in the construction industry is 40 percent higher in the Coastal
Bend than the rest of the nation.
An accompanying chart illustrates the dynamics of
self-employment conditions in the Coastal Bend by plotting
location quotient and shift-share data for different industries.
Those two measures are standard indicators of a region’s
comparative advantages. The size of a bubble reflects the
relative size of self-employment. Clearly, as shown in the
previous pie chart, construction, business administration and
other services witness relatively high self-employment. The
vertical axis of the bubble chart is the location quotient, which
equals the share of self-employment in the workforce of a
specific industry over the corresponding self-employment
share in that industry nationwide. The higher is the reading for
a given industry, the greater is the extent of self-employment
in that industry. The chart shows that self-employment in the
oil and gas extraction industry today has a concentration ratio
more than ten times (12.2) that of the national average. The
location quotients capture the current role of self-employment
across industries.
The horizontal axis is the shift-share ratios, which equals
the ratio of the percent change of self-employment in a local
industry between 2001 and 2014 over the corresponding
percent change of self-employment in that industry nationally.
In contrast to the location quotient, which is static in nature,
the shift-share ratio reflects a change in the relative role of
self-employment over time. The higher is the ratio, the faster
is the growth of self-employment in the Coastal Bend relative
to the U.S. The chart indicates that self-employment in
administrative and support services (6.23), and other services
(5.85) have grown at a relatively faster pace than that in the
rest of the U.S.
Review of South Texas Business Conditions
Source: EMSI Analyst Online
Self-Employment Population
Another characteristic of the regional self-employment population
is the dominance of male workers. The majority of the selfemployed are men, who make up 68 percent of this population.
For the entire regional labor force, 53 percent of the workers are
male. The distribution of self-employment by gender, however,
varies widely by industry. While 95 percent of the self-employed
in construction are male, women make up more than 70 percent
of industries in private educational services, and health care and
social services.
Which occupations are popular for self-employment?
Nationally, self-employment is highly concentrated in the
fields of professional services, such as accounting, legal and
consulting services and scientific services, where high-level
education or certification is required. This also shows up in the
high concentration of self-employment in the “other service”
sector. In the Coastal Bend, more than one-third of its lawyers are
self-employed. Likewise, in the arts and entertainment industry,
about one in three arts workers, designers and entertainers are
self-employed.
Construction is another industry where self-employment
is popular within the region. One in five construction trades
workers are self-employed, and so is one in three carpenters.
The concentration of self-employment in those craft occupations
is less for the rest of the U.S. According to the location quotients
in comparison with national averages, the occupations with
exceptionally high shares of self-employment can be found in
construction trades, oil and gas extraction, and food preparing
and catering. Those occupations contribute much to the high
concentration of self-employment in the construction, oil and gas,
and hospitality industries.