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.