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Trends in Gross Domestic Product and Self-employment of Unincorporated Enterprises in the Canadian Economy, 1987 to 2005

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  • Rispoli, Luke

Abstract

This paper investigates the evolution of the unincorporated sector using the number of self-employed and gross domestic product (GDP), in that sector over the period 1987 to 2005. Self-employment studies have analyzed various characteristics of self-employed workers, including age, sex, immigration status and education, but have generally lacked measures of GDP associated with unincorporated self-employment. This study redresses the lack of economic data, and estimates GDP by industry arising from unincorporated self-employment. This paper updates the 1997 - 2002 estimates of unincorporated GDP derived by Rispoli (2009). The paper also examines how unincorporated self-employment responded to both overall economic trends and business cycles. The rate of unincorporated self-employment was positively correlated to the unemployment rate in the long run. The paper also looks at incorporated self-employment. (Close to one million self-employed were incorporated in 2005). It investigates its relationship to the same macroeconomic conditions to determine if incorporated self-employment has a profile similar to unincorporated self-employment. Previous self-employment studies have typically treated self-employment as a homogeneous group. This paper examines the differences between the two groups and finds that they react differently to macroeconomic conditions. Incorporated self-employment grew substantially between 1987 and 1999 (averaging 3.8% per year), and continued to grow between 2000 and 2005 (averaging 4.1% per year). The evidence suggests that a shift in self-employment did not occur from unincorporated enterprises to corporations, but that different forces were at work in the two sectors. Over the long run, the unincorporated self-employment rate is positively correlated to the unemployment rate. In contrast, the incorporated self-employment rate is not related to changes in the unemployment rate, but is positively correlated to overall GDP growth.

Suggested Citation

  • Rispoli, Luke, 2009. "Trends in Gross Domestic Product and Self-employment of Unincorporated Enterprises in the Canadian Economy, 1987 to 2005," Insights on the Canadian Economy 2009024e, Statistics Canada, Economic Analysis Division.
  • Handle: RePEc:stc:stcp2e:2009024e
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    File URL: http://www5.statcan.gc.ca/olc-cel/olc.action?ObjId=11-624-M2009024&ObjType=46&lang=en&limit=0
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    Cited by:

    1. Danny Leung & Oana Secrieru, 2012. "Real-Financial Linkages In The Canadian Economy: An Input--Output Approach," Economic Systems Research, Taylor & Francis Journals, vol. 24(2), pages 195-223, September.

    More about this item

    Keywords

    Business performance and ownership; Economic accounts; Gross domestic product; Small and medium-sized businesses;

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