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Self-employment in service industries

Over 2.6 million Canadian workers were self-employed in 2008, representing 15.4% of the total workforce, up from 13.8% in 1987. Nearly three-quarters (72% or 1.9 million) of these self-employed persons worked in the services-producing sector.

Among the service industries, only the accommodation and food services group as well as trade posted a decline in the self-employment rate between 1987 and 2008 (-1.8 percentage points to 8.4%, and -3.3 points to 10.8%, respectively).

Service industries with the largest growth in self-employment were finance, insurance, real estate and leasing, where the self-employment rate almost doubled, from 8.6% in 1987 to 16.6% in 2008, and professional, scientific and technical services, where the rate increased from 27.4% to 33.2% during the same period. These are generally high-skill industries.

Other high-skill service industries also posted increases, albeit moderate—information, culture and recreation, with a four-percentage-point growth in self-employment, education (2.1 points) and health care and social assistance (1.9 points).

Chart - Service industries with growing self-employment rates

Source: Statistics Canada, Labour Force Survey.

Just as women's share in the workforce grew during the two-decade period (from 43% to 47%), so did their share among the self-employed, increasing from 30% in 1987 to 35% in 2008.

Service industries with the largest share of self-employed women in 2008 were, unsurprisingly, health and social assistance (65%) and education (62%); women's share in the total workforce of these industries was 82% and 66% respectively.

Women accounted for a third of the self-employed workers in finance, insurance, real estate and leasing services, while their share in this industry's total employment was 57%. In professional, scientific and technical services, their share was 35% of the self-employed and 42% overall.

Well over three-quarters (77%) of the total Canadian workforce (employees and self-employed) worked in the services sector in 2008. The latest Labour Force Survey data show a job gain of 37,000 in self-employment for April 2009, compared with a small decline (-1,100) in the number of employees.

Table - Service industries with growing self-employment rate

Related to this topic:

Recent Developments in Self-Employment in Canada by Nadja Kamhi and Danny Leung, Bank of Canada, Working Paper 2005-8, March 2005.

Microentrepreneurship and the Business Cycle: Is Self-Employment a Desired Outcome? by Federico S. Mandelman and Gabriel V. Montes Rojas, Federal Reserve Bank of Atlanta, Working Paper 2007-15, July 2007.

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