Self‐Employment, the COVID‐19 Pandemic, and the Rural–Urban Divide in the United States☆

Abstract Self‐employed individuals faced numerous challenges amid the global health and economic crisis that was the COVID‐19 pandemic. Similarly, rural and urban workers faced different challenges during the pandemic. This rural–urban disparity further complicates the impacts of self‐employment and exacerbates inequalities resulting from gender, race, ethnicity, or immigration status. This study examines the economic consequences of the COVID‐19 pandemic across these categories in the United States using Current Population Survey data from May 2020 to May 2022. Comparing the wage and self‐employment sectors across rural and urban areas, I examine the effects of individual, business, and geographic characteristics on the probability of work stoppages due to the health crisis. The analysis reveals that recovery from the pandemic was delayed among the self‐employed, while additional education and full‐time employment status can reduce work interruptions for these workers, as does working in select industries. Findings suggest that rural and urban minorities are more likely to face pandemic‐related work disruptions, with key differences between formal and informal self‐employment sectors. Specifically, self‐employed Asians/Pacific Islanders and Native Americans were more adversely affected in rural areas. The study concludes with several policy and program recommendations to assist vulnerable workers, especially in the rural self‐employment sector.