The Impact of Self-Employment on Labour-Productivity Growth: A Canada and United States Comparison

67 Pages Posted: 16 Apr 2009

See all articles by John R. Baldwin

John R. Baldwin

Statistics Canada - Microeconomic Analysis Division

James Chowhan

McMaster University

Date Written: August 28, 2003

Abstract

This paper examines the influence of the self-employed on the growth in labour productivity in the business sector. There has been a dramatic expansion of self-employment in the Canadian economy over the 1987 to 1998 period. In addition, a comparison is made of Canadian and United States experiences in this area over the 1987 to 1998 reference period. This paper argues that the expansion of the self-employed sector in Canada and the weak growth in Canadian selfemployment net income over the decade has resulted in downward pressure being put on the growth in aggregate labour productivity in the business sector. In contrast, the growth in the net income of the self-employment group in the United States has outpaced overall productivity growth in the business sector throughout the 1990s. Almost all of the difference in labourproductivity growth between Canada and the United States in the 1990s can be attributed to the greater growth of self-employment in Canada and the poorer income performance of this group.

Keywords: productivity growth, self-employment, Canada\U.S. comparison

JEL Classification: D24, J24, O47, E24, J21, N12

Suggested Citation

Baldwin, John R. and Chowhan, James, The Impact of Self-Employment on Labour-Productivity Growth: A Canada and United States Comparison (August 28, 2003). Available at SSRN: https://ssrn.com/abstract=1387882 or http://dx.doi.org/10.2139/ssrn.1387882

John R. Baldwin (Contact Author)

Statistics Canada - Microeconomic Analysis Division ( email )

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613-951-8588 (Phone)
613-951-5403 (Fax)

James Chowhan

McMaster University ( email )

1280 Main St. W.
Hamilton, Ontario L8S4L6
Canada

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