Self-employment trends in New Brunswick: 1982-2016 | UNB

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NB-IRDT

Self-employment trends in New Brunswick: 1982-2016

Author: Pablo Miah, Philip Leonard, Ted McDonald
Year: 2020
Category: Economy and Labour

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Introduction

The aim of this study is to investigate self-employment trends in New Brunswick over the past three decades – specifically, from 1982 to 2016. Accordingly, this report analyzes the characteristics of self-employed individuals in the province by age, gender, region, and average income.

Methodology

To estimate self-employment in New Brunswick, this study utilizes the Longitudinal Administrative Databank (LAD): a longitudinal dataset of tax files with information on income and basic demographics for a 20% sample of tax filers in Canada. The report defines self-employment in two primary ways:

  1. Broad – any individual who files self-employment income (including negative) is deemed to be under broad self-employment.
  2. Strict – any individual who files net positive self-employment income greater than 50% of their total income is under strict self-employment.

If an individual reports self-employment earnings in one year but not in the previous year, he/she is considered an “entrant” to self-employment. Likewise, if a tax filer files self-employment income in one year but not in the following year, he/she is considered a “leaver” from selfemployment.

Report Findings

  • Overall, from 1982 to 2016, the number of individuals in broad self-employment has grown, with around 43,000 individuals self-employed in 2016 (7% of the total population aged 15 years and over) as opposed to 31,000 in 1982 (6%).
  • However, estimates for strict self-employment show some fluctuation over the years, with an increasing trend until 1998 with 19,335 individuals (3.3%) followed by a declining trajectory in recent years (16,090 individuals, or 2.6%). The average strict self-employment rate over the 1982-2016 study period is approximately 3%.
  • More males than females are self-employed under both broad and strict selfemployment definitions. However, due to growth in female self-employment (broad and strict) and a gradual decline in male self-employment (broad and strict), the difference has diminished in recent years.
  • The age group comprised of individuals 45-64 years old has the highest numbers for broad and strict self-employment. On average, this age group holds the highest broad self-employment rates (10%) and strict self-employment rates (4.5%). This implies that older groups comprise a significant portion of self-employment while participation of younger population has rather remained low and steady, perhaps due to the aging demographic of the province.
  • Strict self-employment numbers in the Fredericton, Moncton, and Saint John municipalities have remained steady over the last two decades, following an initial increase. In other regions, strict self-employment numbers have gradually declined. Page 7 However, in relation to population changes in respective regions, self-employment rates have remained relatively stable.
  • Broad and strict self-employment numbers in the fisheries and forestry sectors have decreased by at least 50% between 1982 and 2016.
  • Individuals in broad and strict self-employment have experienced mixed trends in average total income, with broad self-employed individuals earning consistently higher incomes than strict self-employed individuals.
  • By definition, average self-employment income from strict self-employment is significantly higher than that of broad self-employment (in which self-employment may be a parttime job), with average incomes of $28,000 and $12,000, respectively, in 2016.