Precarious versus entrepreneurial origins of the recently self‐employed: Work and family determinants of Canadians’ self‐employment transitions

We investigate the wage work and family determinants of self-employment entry using a panel study of Canadian workers (Canadian Work Stress and Health Study). Rather than treating the self-employed as a homogenous group—a characterization that conflates entrepreneurial ventures with lower quality and more precarious self-employment—we disaggregate self-employment entrants by occupational class. Descriptive analyses show that the nonprofessional self-employed—the most common form of self-employment observed in the study—are considerably more likely to report low income (<$25,000) and insufficient work hours compared to wage workers and the professional self-employed. Event history analyses based on a multinomial logistic model also reveal that poor wage-work quality—including low income, job insecurity, and unchallenging work—increases the likelihood of a transition from wage work into nonprofessional self-employment. In contrast, job autonomy and human capital predict an increased likelihood of a transition into professional self-employment. Our results suggest that both classic entrepreneurial and forced motivations explain self-employment entry when the self-employed's occupational class is distinguished; however, findings are mixed regarding the salience of work-family factors in predicting self-employment entry. We discuss the value of using a “good jobs, bad jobs” perspective to disaggregate the pathways from wage work into lower versus higher quality self-employment.