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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.

Suggested Citation

  • Carol Moore & Richard Mueller, 2002. "The transition from paid to self-employment in Canada: the importance of push factors," Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 791-801.
  • Handle: RePEc:taf:applec:v:34:y:2002:i:6:p:791-801
    DOI: 10.1080/00036840110058473
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    References listed on IDEAS

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    1. Lin, Zhengxi & Picot, Garnett & Yates, Janice, 1999. "Rising Self-employment in the Midst of High Unemployment: An Empirical Analysis of Recent Developments in Canada," Analytical Studies Branch Research Paper Series 1999133e, Statistics Canada, Analytical Studies Branch.
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    Cited by:

    1. 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.
    2. Adams, Abass & Cantah, William Godfred & Wiafe, Emmanuel Agyapong, 2014. "Income Insecurity, Job Insecurity and the Drift towards Self-employment in SSA," MPRA Paper 59615, University Library of Munich, Germany.
    3. Teemu Kautonen & Marco Van Gelderen & Erno T. Tornikoski, 2011. "Predicting entrepreneurial behaviour: a test of the theory of planned behaviour," Post-Print hal-00741505, HAL.
    4. 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.
    5. Nong Zhu & Cecile Batisse, 2014. "Travail indépendant et immigrants au Canada," CIRANO Working Papers 2014s-13, CIRANO.
    6. Begona Cueto, 2011. "Explaining regional differences in self-employment rates in Spain," ERSA conference papers ersa10p704, European Regional Science Association.
    7. José María Millán & Emilio Congregado & Concepción Román, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 45-76.
    8. Julie Zissimopoulos & Lynn A. Karoly, 2007. "Employment and Self-Employment in the Wake of Hurricane Katrina," Working Papers WR-525, RAND Corporation.
    9. 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;European Society for Population Economics, vol. 22(4), pages 881-908, October.
    10. Jean-François Wen & Daniel V. Gordon, 2014. "An Empirical Model of Tax Convexity and Self-Employment," The Review of Economics and Statistics, MIT Press, vol. 96(3), pages 471-482, July.
    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. Julie Zissimopoulos & Lynn A. Karoly, 2004. "Transitions to Self-Employment at Older Ages The Role of Wealth, Health, Health Insurance, and Other Factors," Working Papers WR-135, RAND Corporation.
    13. Helena Svaleryd, 2015. "Self-employment and the local business cycle," Small Business Economics, Springer, vol. 44(1), pages 55-70, January.
    14. Marianna Markantoni & Sierdjan Koster & Dirk Strijker, 2014. "Side-activity entrepreneur: lifestyle or economically oriented?," Chapters,in: Agglomeration, Clusters and Entrepreneurship, chapter 7, pages 132-156 Edward Elgar Publishing.
    15. 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.
    16. Zissimopoulos, Julie M. & Karoly, Lynn A., 2007. "Transitions to self-employment at older ages: The role of wealth, health, health insurance and other factors," Labour Economics, Elsevier, vol. 14(2), pages 269-295, April.
    17. Raquel Fonseca Benito & Simon Lord, 2015. "Les déterminants du travail autonome au Québec et au Canada (1993-2010)," CIRANO Working Papers 2015s-45, CIRANO.
    18. Adrian Hatos & Roxana Hatos & Alina Badulescu & Daniel Badulescu, 2015. "Are Risk Attitudes and Individualism Predictors of Entrepreneurship? A Multivariate Analysis of Romanian Data," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(38), pages 148-148, February.
    19. Raquel Fonseca & Simon Lord, 2015. "Les déterminants du travail autonome au Québec et au Canada (1993-201," Cahiers de recherche 1517, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
    20. Raquel Carrasco & Mette Ejrnæs, 2012. "Labor market conditions and self-employment: a Denmark-Spain comparison," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-16, December.
    21. Nyström, Kristina, 2016. "Entrepreneurship after displacement: The transition and performance of entrepreneurial ventures created after displacement," Working Paper Series in Economics and Institutions of Innovation 443, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    22. Zissimopoulos, Julie M. & Karoly, Lynn A., 2007. "Transitions to self-employment at older ages: The role of wealth, health, health insurance and other factors," Labour Economics, Elsevier, pages 269-295.
    23. Kate Rybczynski, 2015. "What Drives Self-Employment Survival for Women and Men? Evidence from Canada," Journal of Labor Research, Springer, vol. 36(1), pages 27-43, March.
    24. Williams Colin & Nadin Sara & Windebank Jan, 2012. "Evaluating the Prevalence and Nature of Self-Employment in the Informal Economy: Evidence From a 27-Nation European Survey," European Spatial Research and Policy, De Gruyter Open, vol. 19(1), pages 129-142, July.
    25. Federico S. Mandelman & Gabriel V. Montes Rojas, 2007. "Microentrepreneurship and the business cycle: is self-employment a desired outcome?," FRB Atlanta Working Paper 2007-15, Federal Reserve Bank of Atlanta.

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