Push or pull into self employment? Evidence from Longitudinal Canadian Tax Data | UNB

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Push or pull into self employment? Evidence from Longitudinal Canadian Tax Data

Author: Philip S.J. Leonard, J.C. Herbert Emery, James Ted McDonald
Year: 2017
Category: Economy and Labour

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Does the choice of self-employment over paid employment reflect that individuals are “pushed” into self-employment by negative economic conditions or “pulled” in by strong economic prospects? Using longitudinal Canadian taxfiler data, we show that the self-employment rate has been very stable over the past decade in spite of the large increase in unemployment rate associated with the 2008 recession. The lack of cyclical association of self-employment rates suggests that self-employment rates are the product of structural and demographic influences in the economy.