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The transition from paid to self-employment in Canada: the importance of push factors

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  • Carol Moore
  • Richard Mueller

Abstract

The share of self-employment in total employment has been growing in Canada throughout the 1990s. Recent research for Canada and elsewhere suggests that some workers may be 'pushed' into self-employment as a response to inadequate opportunities in the paid sector. Examining transitions from paid work to selfemployment using the Labour Market Activity Survey, this push hypothesis is tested using a number of indicators of the economic opportunities facing the newly selfemployed. It is found: (i) longer spells of joblessness favour self-employment, (ii) workers who collect unemployment benefits between jobs are less likely to become self-employed than are workers who did not, (iii) workers who left their previous, paid jobs involuntarily - i.e., due to layoff - were more likely to become selfemployed than those who left voluntarily, but less likely than workers who specified personal reasons for leaving, and (iv) self-employment decisions are independent of the health of the labour market as measured by the unemployment rate. These results are generally consistent with the push hypothesis but provide more ambiguous evidence than found in some other studies.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 34 (2002)
Issue (Month): 6 ()
Pages: 791-801

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Handle: RePEc:taf:applec:v:34:y:2002:i:6:p:791-801

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Cited by:
  1. Mandelman, Federico S. & Montes-Rojas, Gabriel V., 2009. "Is Self-employment and Micro-entrepreneurship a Desired Outcome?," World Development, Elsevier, vol. 37(12), pages 1914-1925, December.
  2. Millán, José María & Congregado, Emilio & Román, Concepción, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE.
  3. Kræn Blume & Mette Ejrnæs & Helena Nielsen & Allan Würtz, 2009. "Labor market transitions of immigrants with emphasis on marginalization and self-employment," Journal of Population Economics, Springer, vol. 22(4), pages 881-908, October.
  4. Federico S. Mandelman & Gabriel V. Montes Rojas, 2007. "Microentrepreneurship and the business cycle: is self-employment a desired outcome?," Working Paper, Federal Reserve Bank of Atlanta 2007-15, Federal Reserve Bank of Atlanta.
  5. Julie Zissimopoulos & Lynn A. Karoly, 2003. "Transitions to Self-Employment at Older Ages: The Role of Wealth, Health, Health Insurance, and Other Factors," Working Papers 135, RAND Corporation Publications Department.
  6. Nong Zhu & Cecile Batisse, 2014. "Travail indépendant et immigrants au Canada," CIRANO Working Papers 2014s-13, CIRANO.
  7. Begoña Cueto, 2011. "Explaining regional differences in self-employment rates in Spain," ERSA conference papers ersa10p704, European Regional Science Association.
  8. Svaleryd, Helena, 2013. "Self-employment and the local business cycle," Working Paper Series 2013:15, Uppsala University, Department of Economics.
  9. Aytul Ayse OZDEMIR, 2010. "Potansiyel Girisimci Olan Kadinlarin Motivasyon Faktorleri ve Eskisehir’de Bir Arastirma," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 10(1), pages 117-139.
  10. Joachim Wagner, 2007. "What a Difference a Y makes-Female and Male Nascent Entrepreneurs in Germany," Small Business Economics, Springer, vol. 28(1), pages 1-21, January.
  11. Kim, GiSeung, 2007. "The analysis of self-employment levels over the life-cycle," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(3), pages 397-410, July.
  12. Jean-Francois Wen & Daniel V. Gordon, 2014. "An Empirical Model of Tax Convexity and Self-Employment," Working Papers 2014-33, Department of Economics, University of Calgary, revised 03 Feb 2014.

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