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 3% to almost 200% per year between 1977 and 2003 (Table 12 and Figure 8).7 During that time there have been just three years (1986, 2000 and 2001) when the net change in self-employment was negative. In 1982 and 1991–92, self-employment grew strongly, while total employment growth turned negative due to economic recessions. It is interesting to note that the two greatest changes 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) – 197% in 1983 and 127% 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.
