Rural and Small Town Canada Analysis Bulletin
A profile of self-employment in rural and small town Canada: Is there an impending retirement of self-employed business operators?
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Self-employment is often considered as an indicator of entrepreneurship. However, not all self-employed individuals innovate or intend to innovate, nor do they grow or intend to grow their business (Hurst and Pugsley, 2010). Thus, not all self-employed are "entrepreneurs" (for definitions and discussion, see Box 1).
In rural and small town areas, self-employed individuals generally operate small(er) enterprises. Most are unincorporated but some are incorporated. These small(er) self-employment enterprises typically provide important services in rural and small town areas. Examples range from general stores to hair styling salons to plumbing and electrician enterprises to dentists.
This bulletin analyzes the relative importance of each of these self-employment businesses in rural and small town Canada. It examines the age structure of self-employed workers to evaluate whether there is an impending surge of retirements among the rural self-employed.
Compared with the more urbanized areas of Canada, we find a higher prevalence of self-employment in rural and small town areas, even when only non-farm jobs are considered. The share of self-employed individuals approaching retirement is also higher in rural and small town areas than in metropolitan areas. Some relatively small industry sectors in rural areas have a particularly high share of self-employed who are approaching retirement age, although most of the self-employed in the pre-retirement age groups remain concentrated in farming, construction and transportation businesses.
These activities may face different patterns of change and different challenges in the near future. This may include a relative employment decline and/or contraction of some sectors, or some consolidation and structural changes in the given sector. It may also put some pressure on the labour market if a retirement cohort is not fully replaced by younger generations providing the same type of services.