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Key Small Business Statistics - July 2008
How has self-employment contributed to job creation?
Generally, the increasing trend toward self-employment has supported total employment growth. Positive contributions to total net employment growth in the private sector have ranged from 9 percent to 52 percent per year between 1996 and 2007 (Table 13).Footnote 9 The number of self-employed workers fell in 2006, which is only the fourth time this has happened over the 1977–2007 period (Figure 8). The other three years were 1986, 2000 and 2001. In 1982, 1991 and 1992, self-employment grew, while total employment growth turned negative due to economic recessions. It is interesting to note that the two greatest increases in the number of self-employed persons relative to the overall change in private sector employment occurred at the end of these recessions (in 1983 and 1993) — 167 percent in 1983 and 125 percent in 1993. This is because when job market conditions tighten, people who cannot find suitable employment tend to start their own businesses and become self-employed.
| Year | Private Sector Total Net Employment Change (thousands) | Private Sector Employees | Self-Employed Persons | ||
|---|---|---|---|---|---|
| Net Change (thousands) | Percentage of Total Private Sector Employment Change | Net Change (thousands) | Percentage of Total Private Sector Employment Change | ||
|
[Description of Table 13]
Source: Statistics Canada, Labour Force Survey, April 2008. Note 1: (-) indicates a negative contribution to total net employment change. Note 2: Net change figures may not add up to total net change due to rounding. Note 3: Differences between these data and those published in previous versions of Key Small Business Statistics are due to revisions made to data from the Labour Force Survey. |
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| 1996 | 169.2 | 80.7 | 48 | 88.5 | 52 |
| 1997 | 340.8 | 162.9 | 48 | 177.9 | 52 |
| 1998 | 350.9 | 294.6 | 84 | 56.3 | 16 |
| 1999 | 299.8 | 272.5 | 91 | 27.3 | 9 |
| 2000 | 258.8 | 318.0 | 123 | -59.2 | -23 |
| 2001 | 138.3 | 235.4 | 170 | -97.1 | -70 |
| 2002 | 298.9 | 261.1 | 87 | 37.8 | 13 |
| 2003 | 315.0 | 227.6 | 72 | 87.3 | 28 |
| 2004 | 186.2 | 134.7 | 72 | 51.5 | 28 |
| 2005 | 144.1 | 85.9 | 60 | 58.2 | 40 |
| 2006 | 240.0 | 253.6 | 106 | -13.6 | -6 |
| 2007 | 295.9 | 180.2 | 61 | 115.7 | 39 |
[Description of Figure 8]Source: Statistics Canada, Labour Force Survey, April 2008.
Footnote 9. In Table 13, employment in the private sector is defined as the total of self-employed workers and private sector employees, regardless of business size. The definition of private sector employees in the Labour Force Survey used in Table 13 is not identical to the definition in the Survey of Employment, Payrolls and Hours (SEPH) data in Tables 5 to 7, but the differences are minor.