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Measuring business ownership across countries and over time: Extending the Compendia data base

Measuring business ownership across countries and over time: Extending the Compendia data base. Chantal Hartog EIM Business and Policy Research André van Stel EIM and University of Amsterdam. COMPENDIA: COMParative ENtrepreneurship Data for International Analysis.

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Measuring business ownership across countries and over time: Extending the Compendia data base

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  1. Measuring business ownership across countries and over time: Extending the Compendia data base Chantal Hartog EIM Business and Policy Research André van Stel EIM and University of Amsterdam

  2. COMPENDIA: COMParative ENtrepreneurship Data for International Analysis • Business ownership rates for 23 OECD countries, 1972-2006, annually • Number of non-agricultural business owners as a fraction of total labour force • Source data: OECD Labour Force Statistics • Harmonisations applied by EIM Business and Policy Research, Zoetermeer, the Netherlands

  3. Countries originally included in COMPENDIA (23) • 15 EU countries • Iceland, Norway, Switzerland • United States, Canada, Japan, Australia, New Zealand Extension with new countries (7) • Poland • Hungary • Czech Republic • Slovak Republic • Mexico • Korea • Turkey

  4. Business ownership definition Number of business owners in COMPENDIA include: • Unincorporated self-employed • Incorporated self-employed (owner/managers of incorporated businesses) Excluded are: • Self-employed in agriculture, hunting, forestry, fishing • Unpaid family workers • Self-employed as secondary occupation

  5. Harmonisations made in COMPENDIA • Harmonisations across countries - Incorporated self-employed. Formally, they are employee in their own business. - Unpaid family workers • Harmonisations over time Trend breaks (definition changes over time)

  6. Owner/managers of incorporated businesses (OMIBs) • Extent to which OMIBs are measured varies by country, depending on survey questions used. • Example: US Current Population Survey - Are you employed by a government, a private company or a nonprofit organization or are you self-employed? - In case self-employed: Is this business incorporated? - Here a number of OMIBs are detected. However, this number is NOT included in self-employment count. - But even the detected number is not complete, OMIBs who classify themselves as employee are not detected (Bregger, 1996).

  7. Inclusion of OMIBs in self-employment count varies by country In OECD Employment Outlook, June 2000, Annex 5A, the inclusion of OMIBs in OECD Labour Force Statistics is categorised as follows: 1. Excluding all OMIBs 2. Classification of OMIBs is unclear 3. Including all OMIBs 4. Including most OMIBs 5. Excluding most OMIBs

  8. Harmonisations applied in COMPENDIA Number of business owners in COMPENDIA: • If definition is “including all OMIBs”: reported number in OECD Labour Force Statistics • Otherwise: • European countries: maximum of OECD and number of non-primary private enterprises according to The European Observatory for SMEs (1994) • Non-European countries: country specific sources. For example: US number of OMIBs estimated by the number of employer firms (US Small Business Administration)

  9. Impact of corrections The raise factor: Total number of business owners according to COMPENDIA / Reported number in OECD Labour Force Statistics, varies from 1 (no correction needed) to 1.26 (France) to 1.56 (US)

  10. Illustrations

  11. Business ownership rate Sweden, trend break 1987

  12. Business ownership rates in 2006

  13. Developments in four countries, 1972-2006 (1)

  14. Developments in four countries, 1983-2006 (2)

  15. Limitations • Correction factor for OMIBs applied constantly over time. • Sometimes crude approximations when little information available (e.g. Switzerland). • Nevertheless, the COMPENDIA data construction contributes to a better comparability of business ownership rates across countries and over time.

  16. Extending Compendia (pilot project EIM - OECD) Distinction of number of business owners by: • employer / own account worker • sector • gross inflow / outflow (in terms of persons, not businesses)

  17. Statistical experiments at the regional level? • Create times series employer / own account worker at regional level and compare to national pattern • Create labour force survey capable of directly measuring number of OMIBs, and compare results with official statistics

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