Rising Self-employment in the Midst of High Unemployment: An Empirical Analysis of Recent Developments in Canada
AbstractThis paper highlights recent developments in self-employment in Canada and explores its relationship to unemployment/full-time paid-employment. There are now two and a half million Canadians working at their own businesses, amounting to 16.2% of the total labour force or accounting for 17.8% of total employment. In the first eight years of the 1990s, self-employment on average expanded by 4.1% per year, contributing to over three out of four new jobs the economy has created. Entry and exit data demonstrate that there are substantial flows into and out of this sector of the economy. Gross flows into and out of self-employment as the main labour market activity averaged nearly half a million per year between 1982 and 1994, amounting to 42% of the total self-employed population.The fixed-effects modelling results show a statistically significant but empirically small negative (positive) relationship between self-employment and unemployment (full-time paid- employment). This conclusion holds true across different data sources, for different time periods, for different measures and definitions, for different empirical samples, and across various estimating techniques. There is also a statistically significant but empirically small negative (positive) relationship between exits out of self-employment and unemployment (full-time paid- employment). It appears that a host of non-cyclical factors are behind the recent surge in self-employment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 1999133e.
Date of creation: 27 Apr 1999
Date of revision:
Labour; Employment and unemployment; Wages; salaries and other earnings; Work transitions and life stages; Labour mobility; turnover and work absences;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Roy, R. & Gauthier, J., 1997. "Diverging Trends in Self-Employment in Canada," Papers r-97-13, Gouvernement du Canada - Human Resources Development.
- Holmes, Thomas J & Schmitz, James A, Jr, 1990.
"A Theory of Entrepreneurship and Its Application to the Study of Business Transfers,"
Journal of Political Economy,
University of Chicago Press, vol. 98(2), pages 265-94, April.
- Blanchflower, D.G. & Oswald, A., 1991.
"What Makes an Entrepreneur?,"
Economics Series Working Papers
99125, University of Oxford, Department of Economics.
- Blau, David M, 1987. "A Time-Series Analysis of Self-employment in the United State," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 445-67, June.
- Van Praag, C Mirjam & Van Ophem, Hans, 1995. "Determinants of Willingness and Opportunity to Start as an Entrepreneur," Kyklos, Wiley Blackwell, vol. 48(4), pages 513-40.
- Parker, Simon C, 1996. "A Time Series Model of Self-Employment under Uncertainty," Economica, London School of Economics and Political Science, vol. 63(251), pages 459-75, August.
- Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
- Schuetze, Herb J., 2000.
"Taxes, economic conditions and recent trends in male self-employment: a Canada-US comparison,"
Elsevier, vol. 7(5), pages 507-544, September.
- Herb J. Schuetze, . "Taxes, Economic Conditions And Recent Trends in Male Self-Employment: A Canada-U.S. Comparison," Canadian International Labour Network Working Papers 11, McMaster University.
- Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August.
- Acs, Zoltán J & Audretsch, David B & Evans, David S, 1994. "Why Does the Self-Employment Rate Vary Across Countries and Over Time?," CEPR Discussion Papers 871, C.E.P.R. Discussion Papers.
- George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc.
- Taylor, Mark P., 1994.
"Earnings, independence or unemployment: why become self -employed?,"
ISER Working Paper Series
26, Institute for Social and Economic Research.
- Taylor, Mark P, 1996. "Earnings, Independence or Unemployment: Why Become Self-Employed?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 253-66, May.
- Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-48, August.
- Irwin Bernhardt, 1994. "Comparative Advantage in Self-Employment and Paid Work," Canadian Journal of Economics, Canadian Economics Association, vol. 27(2), pages 273-89, May.
- Finnie, Ross Laporte, Christine Rivard, Maud-Catherine, 2002. "Setting up Shop: Self-employment Amongst Canadian College and University Graduates," Analytical Studies Branch Research Paper Series 2002183e, Statistics Canada, Analytical Studies Branch.
- Baldwin, John R. Chowhan, James, 2003. "The Impact of Self-employment on Labour-productivity Growth: A Canada and United States Comparison," Economic Analysis (EA) Research Paper Series 2003016e, Statistics Canada, Analytical Studies Branch.
- Garnett Picot & Andrew Heisz, 2000. "The Performance of the 1990s Canadian Labour Market," Canadian Public Policy, University of Toronto Press, vol. 26(s1), pages 7-25, July.
- Nadja Kamhi & Danny Leung, 2005. "Recent Developments in Self-Employment in Canada," Working Papers 05-8, Bank of Canada.
- Heisz, Andrew Nakamura, A. Picot, Garnett, 2001. "Job Tenure, Worker Mobility and the Youth Labour Market During the 1990s," Analytical Studies Branch Research Paper Series 2001155e, Statistics Canada, Analytical Studies Branch.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Brown).
If references are entirely missing, you can add them using this form.