Short summary:

Using longitudinal data from the Survey of Labour and Income Dynamics, this paper studies the determinants of self-employment in Québec and in the rest of Canada by focusing on liquidity constraints, age and aggregate unemployment. The main results are that: the positive effect of investment income on the probability of being self-employed confirms the existence of liquidity constraints; being older increases the probability of choosing self-employment, suggesting that working for oneself may be a stepping stone towards retirement; a high unemployment rate decreases the probability of being self-employed, which suggests that pull factors dominate push factors.

This paper has been the topic of a CIRANO Note.

Publication Authors: Raquel Fonseca and Simon Lord
Number: 15-17
Year: 2015