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Recent Developments in Self-Employment in Canada

  • Nadja Kamhi
  • Danny Leung

The authors document the recent evolution of the self-employment rate in Canada. Between 1987 and 1998, the self-employment rate rose 3.5 percentage points from 13.8 per cent to 17.3 per cent. In contrast, over the 1999 to 2002 period, the self-employment rate fell by 1.9 percentage points, returning the self-employment rate in 2002 to a level only 0.2 percentage points higher than in 1992. The authors explore the possible explanations for this reversal. They describe trends in self-employment by age, gender, and types of self-employment, and then decompose the changes in the self-employment rate into the fraction due to shifts in the industrial structure and the proportion due to changes within each industry. The authors also examine the role of the business cycle and other macroeconomic factors, such as tax rates.

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File URL: http://www.bankofcanada.ca/wp-content/uploads/2010/02/wp05-8.pdf
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Paper provided by Bank of Canada in its series Working Papers with number 05-8.

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Length: 35 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:bca:bocawp:05-8
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  1. Blanchflower, D.G. & Oswald, A., 1991. "What Makes an Entrepreneur?," Economics Series Working Papers 99125, University of Oxford, Department of Economics.
  2. 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.
  3. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  4. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 334-347, Summer.
  5. Leung, Danny, 2006. "The male/female earnings gap and female self-employment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(5), pages 759-779, October.
  6. 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.
  7. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
  8. Roy, R. & Gauthier, J., 1997. "Diverging Trends in Self-Employment in Canada," Papers r-97-13, Gouvernement du Canada - Human Resources Development.
  9. 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.
  10. Lilien, David M, 1982. "Sectoral Shifts and Cyclical Unemployment," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 777-93, August.
  11. Lin, Zhengxi & Picot, Garnett & Yates, Janice, 1999. "The Entry and Exit Dynamics of Self-employment in Canada," Analytical Studies Branch Research Paper Series 1999134e, Statistics Canada, Analytical Studies Branch.
  12. Bruce D. Meyer, 1990. "Why Are There So Few Black Entrepreneurs?," NBER Working Papers 3537, National Bureau of Economic Research, Inc.
  13. David B. Audretsch & Roy Thurik, 2001. "Linking Entrepreneurship to Growth," OECD Science, Technology and Industry Working Papers 2001/2, OECD Publishing.
  14. 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.
  15. Bruce, Donald, 2000. "Effects of the United States tax system on transitions into self-employment," Labour Economics, Elsevier, vol. 7(5), pages 545-574, September.
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