A comparative study of governmental financial support and resilience of self-employed people in Sweden and Canada during the COVID-19 pandemic

ABSTRACT

Globally, self-employed people were among the hardest hit by the repercussions of the COVID-19 pandemic and faced hardships such as financial decline, restrictions, and business closures. A plethora of financial support measures were rolled out worldwide to support them, but there is a lack of research looking at the effect of the policy measures on self-employed people. To understand how different governmental financial support measures enhanced the resilience of the self-employed and improved their ability to manage the pandemic, we conducted a mixed-method study using policy analysis and semi-structured interviews. The documents described policies addressing governmental financial support in Sweden and Canada during the pandemic, and the interviews were conducted with Swedish and Canadian self-employed people to explore how they experienced the support measures in relation to their resilience. The key results were that self-employed people in both countries who were unable to telework were less resilient during the pandemic due to financial problems, restrictions, and lockdowns. The interviews revealed that many self-employed people in hard-hit industries were dissatisfied with the support measures and found them to be unfairly distributed. In addition, the self-employed people experiencing difficulties running their businesses reported reduced well-being, negatively affecting their business survival.

KEYWORDS:

• Self-employed
• Canada
• Sweden
• resilience
• well-being
• COVID-19
• financial support

Introduction

The self-employed and their enterprises are considered to be key drivers of economic growth and represent an expanding group in many countries [1]. In Canada, around 2.9 million people (15%) of the working population were self-employed in 2018 [2]. In Sweden, a slightly lower proportion, 6% of the workers, around 300,000 people, were self-employed in 2019 [3,4]. The self-employed are commonly defined as those who work for their own account and risk [5], such as sole traders or those running their own limited company [6]. In this study, the term “self-employed” will be used, which is generally understood to be equivalent to terms such as “small business owner-managers” and “entrepreneurs” [7].

The COVID-19 pandemic presented major difficulties for self-employed people around the world, including northern countries like Sweden and Canada [8,9]. In spite of similarities between the countries, such as being advanced industrialised nations with high standards of living in the arctic region [10,11], Swedes and Canadians have different approaches to social welfare and economic support, which may have had substantial consequences on self-employed people during the pandemic. Sweden is a social-democratic state that favours individual independence and is characterised by high levels of social benefits and services [12]. Conversely, Canada is a liberal welfare state characterised by a strong market with relatively modest universal transfers or social insurance plans. State support is generally means-tested, with strict eligibility criteria, and is often stigmatised [12]. Sweden and Canada adopted different strategies to tackle the pandemic. Sweden’s measures were relatively mild and based on a combination of recommendations and legally binding regulations, with a focus on decreasing public activity and promoting social distancing [13]. The Swedish government avoided implementing a full lockdown, but introduced restrictions on how many people could gather, which varied between 8 and 50 people [14]. While Sweden allowed shops, bars, restaurants, and schools to stay open [15], Canada implemented more stringent measures, including a number of lockdowns enforced at both federal and provincial levels. Non-essential businesses were closed, and people were encouraged to stay at home. In Canada, there was mandatory face mask-wearing in public places, while Sweden left it up to individual businesses to decide on mask-wearing policies [15–17]. While both countries provided financial support to self-employed people during the pandemic, their distinct welfare systems may have influenced the approaches to, and nature of, the support.

When it comes to other Nordic countries, Sweden also had a less restrictive approach to the pandemic than its neighbouring countries of Norway, Finland, and Iceland. These countries implemented relatively strict measures with lockdowns and quarantine at the beginning of the pandemic to limit the spread of the virus. While the health policies differed between the countries, the support for individuals and businesses was more similar with good social safety nets and introduction of various forms of job retention and wage compensation schemes in the countries [18].

In terms of North America, Canada had, despite its proximity and close connections to the US, a different approach to the pandemic with more strict measures in regards to school, work, and transport closures, limits on gatherings, requirements to stay at home, and border controls [19]. A similarity was that in the manner of Canada, the US offered governmental financial support to workers and business [9,20], but the policy response proved bolder and faster in Canada than in the United States [9].

Businesses globally were affected by the COVID-19 pandemic, with sectors such as hospitality, food, and transportation especially impacted. Compared to larger businesses, self-employed people were particularly vulnerable due to their typically limited financial and managerial resources [21]. In addition, they faced a high risk of income loss, difficulties working with customers due to mobility restrictions, and problems complying with new regulatory frameworks [21,22]. Furthermore, self-employed people were overrepresented in some of the sectors that were shut down or restricted due to quarantine. This was illustrated in a Dutch study conducted during a lockdown in March 2020, which found that around half of the self-employed people experienced a reduction in work hours. In contrast, this number was only 27% of salaried employees [23]. The pandemic not only impacted self-employed people’s businesses, but it also increased uncertainty and stress, and reduced social contact and support, which had a negative impact on their well-being [24,25]. For example, a large global study found that self-employed people’s well-being was on average 12% lower during the pandemic compared to pre-pandemic levels [25]. Compared to waged workers, there are certain professional demands that are specific to self-employed people, such as uncertainty, time demands, risk and responsibility, which may increase the likelihood of experiencing greater stress [26]. For many self-employed people their work demands increased during the pandemic, and the circumstances created yet another array of stress [27]. Studies have shown that the worry of getting infected by COVID-19 and financial problems during this period increased the risk of loneliness, insomnia, fear, confusion, and anger [28–30]. These additional stressors likely have affected the mental health of self-employed people [31] and increased their levels of burnout [27,32]. In addition to their own suffering, any hardship, adverse circumstances and health problems among the self-employed may reduce the chances of their business surviving [33,34].

During the pandemic, many countries implemented extensive governmental actions to assist self-employed people. These typically included subsidies, deferrals of payments, loans, and loan guarantees [35]. However, there are indications that, even in countries with advanced social security systems, these kinds of support policies were insufficient to protect some categories of the self-employed. These categories include those who recently became self-employed, part-time workers, digital platform workers, and those with mixed-income sources [35–37]. Although many self-employed people experienced difficulties during the pandemic, they also demonstrated resilience in terms of being adaptive, agile, finding new opportunities, and applying for government support [25]. Those self-employed who acted in a more resilient way during the pandemic fared better financially, had a more positive long-term outlook for their business, and experienced greater well-being [25]. Resilience relates to the process through which an actor builds and uses their capability endowments to interact with the environment in a way that positively adjusts and maintains functioning prior to, during, and following adversity [38]. The ability of small businesses to handle challenging situations is closely connected to the resilience of their surrounding ecosystems [39]. Recent Hungarian research shed light on the positive effect of financial support on small businesses. The study found that financial support significantly and positively correlated to the resilience of businesses and that assisted companies also were more optimistic regarding their outlooks. This was consistent across all sorts of small businesses [40]. To be better prepared for future challenges or difficult times, scholars stress the importance of evaluating the effectiveness of the different policy measures for small businesses and how these effect their ability to handle crises [41].

Given these circumstances, the aim of this study was to conduct a comparative policy analysis of governmental financial support in Sweden and Canada to gain an understanding of how different governmental financial support measures enhanced self-employed people’s resilience and improved their chances of successfully handling the pandemic. In addition, individual interviews were carried out with Swedish and Canadian self-employed people to gain an understanding of how they experienced support measures and how these measures factored into their resilience during restrictions and after the restrictions had ended.

Combining a comparative analysis of policies with interviews with self-employed people in Sweden and Canada provided a more comprehensive and deeper understanding of the policies and measures taken by the governments to support the resilience of the self-employed during the COVID-19 pandemic than a policy analysis alone.

Materials and methods

Data was gathered from publicly available documents describing policies, and from interviews. The use of different data sources and methods allowed for triangulation, as findings from both the policy documents and interviews were compared and contrasted to validate and corroborate the findings [42]. The policy documents provided a context for understanding the official policies and guidelines, while the interviews provided insights into the perspectives, experiences, and nuances related to the implementation and impact of these policies on an individual business level.

For policy data, information on the main subsidies during COVID-19 in Canada was derived from the Government of Canada’s websites [43–48]. Key sources for the Swedish support measures were the Government of Sweden, the Swedish Tax Agency, the Swedish Agency for Economic and Regional Growth, and Verksamt, a website for government services for businesses [49–52].

Individual interviews with self-employed people (i.e. entrepreneurs and small business owner-managers) were conducted by the first author either in person or by telephone, depending on individual preference. The interviews were performed in November and December 2022, when closures and restrictions had ended. Nine managers were purposively recruited in Jämtland, Sweden, and in Ontario, Canada (Table 1). The inclusion criteria were self-employed people, with less than 10 employees, representing different sectors in the service industry, which is the industry that was hardest hit by the pandemic. These were selected through maximum variation purposive sampling by email, in which a Google search-engine was used to find participants that appeared to have different characteristics or experiences of the pandemic. In addition to the emails, snowball sampling was used to get a wide range of perspectives on the topic. Our final sample in Sweden included a small shop-owner, a pastry business owner, an Amazon consultant, and a work optimisation business owner. The Canadian self-employed people were an optician, a hairdresser, a chef, an academic editor, and a gym owner.

Table 1. Characteristics of the participants.

Country	Sweden	Canada
Self-employed, total	4	5
Gender
Male	2	3
Female	2	2
Age
<40	0	1
41–50	2	2
51–60	2	1
>61	0	1
Education
High school	2	0
Vocational training school	0	1
Upper secondary school	0	2
University	2	2
Civil status
Married/cohabiting	3	4
Single	1	1
Number of employees
0	2	3
<5	1	1
6–10	1	1
Industry
Retail, personal services, restaurant	2	4
Consultancy sector (e.g. educational courses, selling, training and providing services)	2	1

A semi-structured interview guide was used for the interviews, which included topics about the background of the self-employed people (e.g. why they started their businesses), governmental financial support during the pandemic, and their work environment (financial, social, etc) during and after the pandemic. The audio-recorded interviews lasted between 30 to 70 minutes and were transcribed verbatim after the interview.

Qualitative data analysis

The analysis was performed in four steps. The first step was analysing the policy documents, which involved skimming, reading, and interpreting documents [42]. A constant comparative method originally developed by Glaser and Strauss [53] and further elaborated by Bowen [42] was used to identify similarities and differences between the policies in the two countries. After reading and reviewing the policies, initial categories were created based on characteristics in the data [42]. Three categories were formed: employment protection, social insurance, and unemployment protection (Table 2). In addition to providing contextual richness to the research, the policy documents were particularly useful before the interviews and provided leads for informing questions [42].

Table 2. Coding during document analysis.

Category	Code	Documents: Sweden	Code	Documents: Canada
Employment protection	Short-time work allowance	Short-time work allowance – Tillväxtverket (archive.org)	Canada Emergency Wage Subsidy (CEWS)	Canada Emergency Wage Subsidy (CEWS) – Canada.ca (archive.org)
	Reorientation support	https://www4.skatteverket.se/rattsligvagledning/edition/2020.15/383381.html	Canada Emergency Rent Subsidy (CERS)	Canada Emergency Rent Subsidy (CERS) – Canada.ca (archive.org)
	Small business loans	https://www.almi.se/information-med-anledning-av-coronaviruset/faq-corona/	Tax deferrals	https://www.canada.ca/en/department-finance/economic-response-plan/completed-measures-respond-covid-19.html
	Tax deferrals	https://skatteverket.se/foretag/skatterochavdrag/skattekontobetalaochfatillbaka/tillfalligtanstandmedskattebetalning.4.1c68351d170ce55452710af.html#Svarpavanligafragor	Canada Emergency Business Account (loan)	Canada Emergency Business Account (CEBA) (ceba-cuec.ca)
Social Insurance	Paid sick-leave	Sjukpenning för dig med aktiebolag (archive.org) & Sjukpenning för dig med enskild firma (archive.org)	Reduced hours required for employment insurance (EI) special benefits (If the self-employed paid premiums)	https://www.canada.ca/en/employment-social-development/news/2020/08/supporting-canadians-through-the-next-phase-of-the-economy-re-opening-increased-access-to-ei-and-recovery-benefits.html
	Waived one- day waiting period for sick-leave	Coronaviruset – det här gäller (archive.org)	Waived one-week waiting period for EI claimants	https://www.canada.ca/en/employment-social-development/news/2021/01/ei.html
	Infection carrier allowance	Smittbärarpenning och reseersättning för dig med enskild firma (archive.org) & Smittbärarpenning och reseersättning för dig med aktiebolag (archive.org)
Unemployment protection	Reduced hours required for unemployment allowance	A-kassan förändras tillfälligt Regeringen.se (archive.org)	Canada Worker Lockdown Benefit (CWLB)	https://www.canada.ca/en/revenue-agency/services/benefits/worker-lockdown-benefit.html
			Canada Emergency Response Benefit (CERB)	https://www.canada.ca/en/revenue-agency/services/benefits/recovery-benefit.html
			Canada Recovery Benefit (CRB)	https://www.canada.ca/en/revenue-agency/services/benefits/recovery-benefit.html
			Canada Recovery Sickness Benefit (CRSB)	https://www.canada.ca/en/revenue-agency/services/benefits/recovery-sickness-benefit.html

As a second step, data from semi-structured interviews were collected from each country to get an understanding of the actual implementation of policy and how it was experienced by those interviewed. After the interviews had been performed, the transcripts were read several times to get a sense of the whole. Meanings were then condensed, and an initial open coding was performed to identify initial subcategories.

A content analysis was performed in step three, and coded data from policy documents and interview transcripts were merged (Table 3) [54]. A constant comparative method was employed to compare the coded interview data with the initial categories identified in the policy analysis. This approach allowed for the identification of similarities and differences across the two sources of data [42]. Data were compared with data and with codes in order to organise ideas and pinpoint concepts that could be clustered together. A total of 34 subcategories were formed from the analysis. The data were abstracted further by combining the subcategories that had similar contents into seven categories. The latter were then combined into three main categories that encapsulated the key findings of the research: Welfare protection and effects, Self-employed well-being, and Agility during COVID-19 [54].

Table 3. Content analysis with document and interview data.

Sub-category	Generic category	Main category
	Welfare	Welfare protections and effects
Unemployment protection
Employment protection
Social insurance
Implementation of support
Unfair	Lived experiences
Information flow
Government did well
Helpful support
Easy to get support
Small businesses not prioritized
Finances	Influence on business performance
Lockdowns
Could telework
Could not telework
Financial problems	Personal struggles	Pandemic consequences on the well-being of Self-employed people
Stress
Business worries
Burn-out
Drinking problems
Hard to focus
Good financial situation	Easing factors
No stress
Essential business
No loans
Meetings online	Digitalization	Agility during COVID-19
Courses online
Less commuting
New products	Problem solving
Improved equality
Developed app
Delivery
Advertised on social media
Did not give up
Proactivity

The final step involved examining similarities, differences, and patterns between the data for Canada and Sweden. The findings from the policy analysis and the interviews were integrated for each country to provide a comprehensive comparative understanding of the research topic. The steps in the analysis process are further described in Table 4. The data management tool NVivo (1.7) was used to organise the data.

Table 4. Steps in analysis process.

Step 1: Policy and literature analysis
Policy analysis
Skimming, reading, and interpretation of documents. Reviewed sentences from the documents to code the data. Looked for similarities and differences. Identified initial categories in the text based on the main themes in the data.	A constant comparative method was used to identify patterns and categories relevant to the research topic. The approach was inductive, allowing for new categories to emerge and refinement of existing ones.
The policy analysis provided a foundation for the subsequent analysis of interview data by helping to inform the development of interview questions.
Step 2: Interview data analysis
Semi-structured interviews
4 interviews in Sweden 5 interviews in Canada	Semi-structured interviews in each country were conducted to gain an understanding of the actual implementation of policy and its effectiveness for those interviewed.
Coding of interview data
Transcribed interviews were read to make sense of the whole. Open coding was performed to identify initial categories.	An inductive approach was employed to code the interview data based on its characteristics, to make sense of the new data and to create initial subcategories.
Step 3: Merging policy, document, and interview data sets
Content analysis
Organised coded data from the policy documents and the interview transcripts. Identified patterns in the data. A back-and-forth interplay with the data: compared data with data and with codes in order to organise ideas and pinpoint concepts that could be clustered together.	A constant comparative method was employed to compare the coded interview data with the initial categories identified in the policy analysis. This approach allowed for the identification of similarities and differences across the two sources of data. The aim was to synthesise the findings from the different sources of data to gain a deeper understanding of the research topic: the ideal (in the policy) and the actual (the policy implementation as experienced by the self-employed). Abductive reasoning was applied using both data sources to gain new insights.
Formation of categories
34 subcategories Seven categories Three main categories	A total of 34 subcategories were formed from the analysis. These were further grouped into seven categories. The aim was to identify broader categories that could be used to organise the data in a meaningful way. The seven categories were then further analysed to identify three main categories that encapsulated the key findings of the research. The interviews provided more subcategories than the policy and literature analyses did due to richer and a more diverse range of data.
Step 4: Cross-country comparison
Integration of data
Examined similarities, differences, and patterns between the data for Canada and Sweden.	The findings from the policy analysis and interviews were integrated for each country to provide a comprehensive, comparative understanding of the research topic.

Ethics

The research study was approved by Sweden’s Ethical Review Board (Dnr 2020–05223). Only publicly available documents were included. Interview participants gave their written consent to participating in the study and were assured of confidentiality and anonymity. All of the data was properly stored according to the Swedish Act on Ethical Review of Research Involving Humans (SFS 2003:460).

Results

The results section explains the three main categories of the results: Welfare protection and effects for self-employed businesses, the well-being of self-employed people during the pandemic, and how self-employed people improvised during COVID-19. The first results section on welfare protection is mainly based on the policy analysis, while the second and third results sections are derived from interview data.

Welfare protection and effects

To support the resilience of self-employed people during the pandemic, both Sweden and Canada introduced mixed sources of governmental support, including labour support, tax deferrals, loans for small businesses, and relaxed access to social insurance [55].

In Sweden, the largest support programme was short-time work, meaning that employers who reduced their employees’ work hours could receive financial support from the government covering a substantial part of the salary costs [56]. The legislation for short-time work was only applicable to companies with employees or to self-employed people with limited companies. Hence, the self-employed who were sole traders were not eligible for this support [57], omitting 42% of the Swedish businesses in this category [58]. Research regarding how short-time work affected the self-employed with employees is scarce. However, some evidence points to its effectiveness in helping to restart long-term viable firms after a temporary economic downturn [56]. The major measure implemented for businesses in Canada was the Canada Emergency Wage Subsidy [59]. Wage subsidy programmes were common in countries with no pre-existing wage support schemes like short-time work [60]. Just as with short-time work in Sweden, Canadian self-employed people operating a business with no employees were excluded from this support. When it comes to support programmes for businesses, it seems that policymakers in both Sweden and Canada concentrated on companies with employees, leaving out the self-employed with smaller businesses. This is consistent with policies globally, where micro firms (with 0–9 employees) were about half as likely to receive support as large firms [61].

In addition to taking measures aimed at mitigating the pandemic’s economic effects, the Swedish and Canadian governments strengthened the social insurance systems for the self-employed during this time. In terms of sick pay, Swedish self-employed people are normally eligible for an 80% replacement of wages when ill (up to an income ceiling). During the pandemic, this was expanded in several ways, such as removing the one-day waiting time for benefits, and allowing suspected carriers of COVID-19 to be eligible for sick pay covering the first 14 days, even if the illness was not confirmed [62,63]. In contrast to Sweden, Canadian self-employed people can normally choose to opt in to unemployment insurance schemes for parental, sickness, and caregiver leave, but they have to pay a rather high premium for this. The eligibility criteria are strict and benefits are fairly low (up to 55% of the wage, up to a maximum amount) [64]. It is uncertain how many take this opportunity; many may be unaware of the benefits or lack the finances to afford it [36]. During the pandemic, the threshold of previous earnings for Canadians was reduced, including a shorter waiting period and easier qualifying rules [65]. For those who were not eligible for unemployment insurance, a temporary benefit called the Canada Recovery Sickness Benefit (CRSB) was launched. This benefit gave financial support to self-employed people who were unable to work due to illness or had to self-isolate due to COVID-19 [44].

A temporary expansion of unemployment insurance (which normally is 80% of the gross salary for 300 days) was provided to the self-employed in Sweden. Those who received unemployment benefits could continue with some business-related activities as long as the activities supported the resumption of operations once the market situation improved. In addition, they could pause their operations in order to receive the unemployment insurance and could do so again within the next five years. Eligibility was also reduced to three instead of six months of prior work contributions [66]. In Canada, self-employed people are distinguished from employees, and are not entitled to unemployment benefits through federal unemployment insurance, leaving them without any temporary income support if, for instance, their business fails [67]. Nevertheless, a large influx of unemployment insurance applications during the pandemic forced the federal government to create a parallel system alongside unemployment insurance to quickly give emergency support to the unemployed. To provide income support to workers (including self-employed people) who were temporarily out of work due to the pandemic, the Canada Emergency Response Benefit (CERB) was implemented [68]. This measure provided workers with income support if they were not eligible for unemployment insurance. When the CERB had expired, the Canada Recovery Benefit (CRB) was introduced, and was provided to those who still faced financial challenges after the CERB had ended, and were not entitled to unemployment insurance [69].

The Swedish measures can be said to represent a bolstering of Sweden’s legacy as a social democratic welfare state, relying on relatively generous universal protection systems. This can be seen, for instance, in the increase in availability and generosity of social insurance during the pandemic. The main support initiative for businesses was the short-term work programme, which was recognised as being fairly generous by international standards. This measure covered a wide range of workers, such as those in part-term work and in temporary employment, while it only required a minimum employment period of 3 months [70]. However, despite introducing these support packages, a study indicates that many Swedish self-employed people did not apply for assistance (e.g. short-time work) due to ineligibility [71]. Moreover, the programme also faced criticism for its lengthy waiting times for applications and payments as well as the drawn-out time it took to appeal against negative decisions [72]. Canada took a different approach to Sweden, and introduced the temporary unemployment support measures of CERB and CRB. These were considered helpful for many self-employed people who were directly affected by the pandemic and unable to work [73]. However, the measures did not come without limitations. For instance, for both measures self-employed people needed to prove earnings of $5,000 or more in 2019, 2020 or in the past 12 months. This condition may have led to difficulties for those who had recently started their businesses as they may not have made this amount. Furthermore, now that the CERB and CRB programmes have closed, self-employed people in Canada continue to remain excluded from federal unemployment insurance [48]. Notably, a survey revealed that as many as 94% of self-employed respondents believed that there was not enough financial support available during hardship prior to the introduction of the temporary support measures [65]. This indicates that there is a wish to see improvements in the unemployment programme and make it inclusive of self-employed people.

A difference between Canada and Sweden was that self-employed people in Canada were not able to get unemployment insurance prior to the pandemic. Nevertheless, during the pandemic, they were able to obtain benefits such as the CERB and the CRB. During the interviews, several people mentioned that they hoped that including the self-employed in pandemic support packages was a first step towards regularly incorporating them into federal programmes, such as unemployment insurance. One person working as a freelance editor expressed this wish as follows:

Because the federal government is just always behind social reality … Its programs have always been for employed people, and although there’s more and more self-employed people, they [the government] just never really caught up. They just don’t even think about it, the attitude is: “If you’re self-employed, yeah it’s more risky. Yeah, OK in terms of your income and so on and that’s your decision, right? It’s your decision, the government shouldn’t have to help you if you’re self-employed”. I just completely disagree with that because there’s more and more sectors or types of jobs that are almost entirely done by self-employed people, yeah? IP 2, Canada.

One of the similarities across both countries was the mixed feelings about the support measures. Looking at the positive aspects, some self-employed people found the application processes to be easy to grasp, and that obtaining the support went quickly. One of the Swedish self-employed people that coped well during the pandemic mentioned that she was impressed that she could receive “short-time work” support: “I was rather surprised, like wow, are we just going to get money?” IP 2, Sweden. Similarly, Canadian self-employed people who coped well stated that receiving financial assistance, such as rent subsidies and the Canada Emergency Response Benefit (CERB), provided them with peace of mind, even though some believed they would have been able to cope with the situation even without the financial support. This was because they worked in businesses where they could telework, they had no loans, lived with a partner who earned money, and/or they had savings.

For other self-employed people, applying for and receiving financial support was far from effortless. Two of the Swedish self-employed people had to repay the money they received from “short-time work” support for different reasons. One described that it was due to unclear information and problems with the website where they applied for the support, and the other said it was due to taking dividends out of the company. One of them managed to get through the pandemic without financial support but stated that it made him less resilient and that it took an extreme effort to continue with the business without support. The other self-employed person said that she was still waiting for a decision on whether she had to repay the short-time work support that she had received. She explained that the potential repayment, in combination rising costs due to inflation and global supply chain constraints, would lead to bankruptcy for her business. Similar issues regarding repayments were reported by the Canadian self-employed. One person in a hairdressing business had to close his business during the lockdowns. As he could not work, he received two CERB payments. However, he soon learned that he was not eligible for the support as he had not filed taxes the year before.

And getting those payments helped a lot in the beginning. And then what ended up happening was that there was a rule that if we hadn’t paid in, like I think $15,000, the year before that you weren’t eligible for it. And … my income tax was not filed for the year before. So, they said you had to call a certain phone number … and I was afraid, to be honest with you, with all the chaos that they’re going to demand that I file my taxes immediately and everything else. So, I just avoided the situation. IP 4, Canada.

It was evident from the interviews that the self-employed people interviewed in both countries perceived that support measures were unfair for smaller businesses compared to larger businesses, especially regarding the application process. There were also differences in resilience depending on whether the self-employed were able to telework or not. Teleworkers all stated that they handled the pandemic fairly well, whereas the majority of the self-employed who had to work on site struggled. The self-employed affected by lockdowns in Canada, where there were strict restrictions, were particularly critical of how smaller business were treated. One person in the gym business said:

I hate my government basically more than ever (…). Forty percent of the GDP of Canada is small businesses and the amount of small businesses that are closed or that are going to close or that are no longer sustainable is extremely high. I don’t know any small business owners that are doing well. Most of us are either closed, debating on closing or, like me, are struggling trying to dig themselves out of this. IP 1 Canada.

Even though Canada rolled out several new benefits during the pandemic, many of the self-employed said that the eligibility criteria were strict and that they did not qualify for them. Reasons mentioned were that they earned insufficient income in the preceding 12 months or they thought their work sector didn’t qualify. To be able to maintain their businesses, several self-employed people had to take loans. These people emphasised that benefits and tax breaks, instead of loans, would have made it easier to get through the pandemic as accruing debt while earning little money made it hard to proceed with the business.

In sum, a key difference between Sweden and Canada was the fact the federal government in Canada aimed to strengthen the resilience of the self-employed people by providing unemployment insurance (CERB) during the pandemic, whereas this was possible in Sweden even before the pandemic. Despite this contrast, similarities were also found. For example, the self-employed who could not telework were less resilient, and when providing financial support, the governments did not differentiate between businesses that were doing well and those that were having difficulties. Another finding was that self-employed people in both countries had to repay the financial support they received during the pandemic, which had a negative effect on their resilience.

Pandemic consequences on the well-being of self-employed people

A second key finding from the interviews was that financial problems and uncertainty about the future resulted in a decreased level of well-being in the self-employed people that were struggling in both countries. For instance, one Swedish person who appealed against a negative decision regarding financial support was still waiting for a decision after two years. “Having it hanging over you for as long… it’s stressful. […]. Well, it’s actually super, super stressful”. IP 4, Sweden. Another person who did not meet the eligibility criteria for financial support stated:

You feel low when the business doesn’t perform well. You start to wonder: is there something wrong with me? Or is there something wrong with my company? IP 3, Sweden.

Similarly, many self-employed people in Canada expressed that they were not eligible for sickness benefits, unemployment benefits, or support from the temporary CERB and CRB programmes, which caused a lot of stress and, in turn, had a negative effect on their resilience. One self-employed person in the hairdressing business explained that he developed a serious alcohol problem due to the whole situation and lack of work, for which he had to get professional help:“Yeah, I definitely consumed way too much alcohol and got to the point where it was a problem for myself”. IP 4, Canada.

Similarly, a person in the gym business who was not eligible for financial support said that stressing over money and uncertainty about the future of the business decreased his well-being:

Stress … mostly over money and just constantly worrying about it. Before I had plans for six months, a year, or five years. Now I can’t plan for any of that, because like I had 10 years of statistics and data, and I knew what worked. I know what times were busy, I knew what numbers came in, my business was stable. I knew my business very well. Now it’s been all thrown upside down. IP 1, Canada.

A person in the restaurant business was able to get financial support but had to wait over six months to receive it. The constant worry about the business and working long hours to keep the business going lowered her sense of well-being. This had a negative effect on her resilience as it led to concentration problems and affected how she performed her work. Eventually she suffered burn-out due to stress and had to take several weeks off work to rest and receive counselling.

In summary, the well-being of self-employed people in the hardest hit businesses that struggled financially and were not able to get financial support was negatively affected. This reflects how self-employed people and their businesses are intertwined, and that uncertainty and business difficulties can have a negative impact on their well-being, which indirectly affects their resilience.

Agility during COVID-19

A third key finding from the interviews was that the lack of support for smaller businesses forced self-employed people in both countries to start doing things differently in order to deal with the pandemic. Most of the self-employed people in our study expressed that the demand for their services dropped from one day to the next at the beginning of the pandemic, and that they had to rapidly adjust their business to address both challenges and opportunities. This included changes such as selling new products, launching new services and changing way they served customers. Without this adaption, several stated that their businesses would not have survived. One of the Swedish self-employed who had a physical shop selling and repairing machines noted that people shifted to online shopping more than before and that the demand for his products thereby decreased significantly. He did not want to enter the online market as his field already was saturated, and he therefore had to come up with new, creative ways to retain his customers.

So what I did was that I announced that I would close the shop for one week a month for 3 months. I advertised on Facebook, among other things, that I would collect and leave the machines to be repaired at people’s homes within a 15-km radius, free of charge. IP 3 Sweden.

In contrast to Sweden, many of the Canadian self-employed were affected by periods of lockdowns, where businesses deemed as non-essential and “at-risk” had to close. Three of the interviewees, one in each of the gym, restaurant, and hairdressing businesses, were impacted by lockdowns in different ways. The person working in the restaurant business stated that in-house service was not possible and that restaurants could only sell take-out food. Given that established delivery apps charged restaurants a large fee, she wanted to avoid that and so she sprang into action and created her own online delivery system. In addition, to be able to keep her staff and help people in need during that difficult time, she came up with a creative solution to deliver food to health centres and charity organisations.

So I made 100 sandwiches every week and brought them to a community health center. And then I made 30 halal meals that could be reheated that went to a charity organization. So, they paid a portion of the labor [costs] that went into making those, and they paid for the food IP 5, Canada.

Although many responses from self-employed people during the pandemic were somewhat reactive, they also saw the pandemic as an opportunity to work proactively, by reviewing their offerings and portfolios, and working on the business and themselves to be more resilient after the pandemic. This involved, for instance, updating equipment, taking courses, improving equality, and making the workplace more attractive for employees. Several described that they had to digitalise parts of their business (e.g. create online ordering systems) to be able to respond to customer behaviours and needs. Some businesses that held in-person training courses had to move to online solutions, and meetings had to be conducted through Zoom or Teams. Many said that that being able to meet clients and colleagues online made them more efficient and that the reduced need for travel was a great advantage.

In summary, due to the lack of support measures from the Swedish and Canadian governments, self-employed people in the hardest hit sectors were forced to start doing things differently. They showed agility by adapting plans and changed the way they worked to be able to attract customers.

Discussion

The aim of this study was to compare policies addressing governmental financial support in Sweden and Canada to gain an understanding of how different governmental financial support measures enhanced self-employed people’s resilience and improved their chances to successfully manage their business during the pandemic. In addition, individual interviews were carried out with Swedish and Canadian self-employed people to explore how they experienced the support measures and how these measures factored into their resilience during the restrictions and after they had ended.

A key finding from the analysis was that the federal government in Canada aimed to boost the resilience of the self-employed people during the pandemic by providing unemployment insurance (CERB), whereas this was available in Sweden prior to the pandemic. This shows that Canada has the capacity and possibility to provide income protection for self-employed people [36]. For instance, allowing less strict qualifying terms for unemployment benefits may help reduce the gap in coverage and increase the resilience of self-employed people during periods of difficulty. Despite this difference, the two countries also had similarities. For instance, those unable to telework, such as those in the retail, restaurant, gym, and hairdressing businesses, were less resilient during the pandemic due to financial problems, restrictions, and lockdowns. This is consistent with the findings of previous studies showing that businesses were unevenly affected by the pandemic [74].

The key findings from the interviews were that, even though Sweden and Canada implemented several new support measures during the pandemic, many self-employed people were dissatisfied with the measures and found them to be unfairly distributed (e.g. larger companies received more support). The findings from the interviews also suggested that the support was equally available to more and less prosperous businesses, so it did not differentiate by need. Some Swedish and Canadian self-employed people who coped fairly well expressed that they were surprised that they were able to receive support or could have managed without the support, which raises the question of whether the support was well-targeted. Similar to these interview findings, recent research has found that a significant amount of the financial support allocated to businesses in Sweden was given to those that did not need assistance [75]. Likewise, in Canada almost $5 billion of excess payments were distributed to people that did not qualify for the support [76]. In addition, it is likely that some self-employed people in Sweden and Canada did not apply for the support due to strict and unclear eligibility criteria [71,77], as was emphasised in our interviews. This seems to have been an issue widespread globally, as the self-employed that may have been in greatest need of support (e.g. those with low incomes, and in hard-hit businesses) appeared to have used governmental financial support to a lesser degree [74].

The self-employed people in Sweden and Canada who ran businesses that were severely impacted by the pandemic expressed that their sense of well-being was reduced. This was for instance due to uncertainty about the future, financial distress, and a lack of governmental financial support. These challenges and reduced well-being had in turn a negative impact on their resilience and ability to run the business. Research has found that financial distress may affect well-being negatively and that the self-employed may be affected more than waged workers [78–80]. Some of the reasons for this may include the risk of losing their business and source of income, in the case of debts or other financial problems [81], or stem from their perceived responsibility for employees, clients, and other stakeholders [82]. Similar to our findings, recent Swedish research on self-employed people revealed that well-being played a crucial role as a resource in enabling resilience, leading to both personal and business success during the pandemic [83].

Despite demonstrating resilience by getting through the pandemic, showing agility, using problem-solving abilities, and quickly responding to the adverse situation, the majority of self-employed people in the hard-hit sectors found it hard to move forward with their businesses due to economic restraints, such as insufficient sales. Resource deprivation, in this case financial support, may have a negative effect on even the most resilient of self-employed individuals [84]. For the self-employed and their businesses to be able thrive, the focus needs to be directed towards other things than survival [85]. In line with our findings, research on self-employed people in Hungary during the pandemic found that receiving financial support helped companies to become more resilient during economic crises. In addition, these self-employed people also showed more optimism regarding their prospects than unassisted companies [86]. Access to financial support may provide the flexibility for adjustments that allows self-employed people to be more agile, hence resilient, and make changes in the face of challenges [87].

Limitations and strengths

The small sample size of nine interviewees may be considered a limitation. However, as the material was rich [88] and therefore adequate [89], it was deemed sufficient. In order to ensure that perspectives and contexts varied from each other, maximum variation sampling was employed, which added depth and relevance to the research. The policy analysis was conducted prior to the interviews, and provided a deeper understanding of the context and policy framework, as well as giving valuable leads for the interview questions [90]. A strength of the study is that it to our knowledge, is the first study to conduct a comparative policy analysis and interviews with self-employed people in two countries during the pandemic. This allowed for validation and corroboration of the findings and provided a broader perspective than the separate data sources alone. Non-leading, open-ended questions were used to mitigate potential bias during the interviews and to allow participants to express their perspectives freely. To establish the trustworthiness of the findings, credibility, transferability, dependability, and confirmability were considered [91]. Credibility was established by triangulation (getting data from two sources: documents and interviews), and through peer debriefing. Transferability was obtained through clear descriptions of the research process. An audit trail (checking chronology of research activities and processes) was used to simultaneously achieve dependability and confirmability.

Conclusion and implications

A main finding from this study was that Canada introduced temporary unemployment insurance (CERB) to assist self-employed people who faced financial hardship as a result of the pandemic. In contrast, unemployment insurance for self-employed people was already in place prior to the pandemic in Sweden. Another significant finding is that self-employed people in both countries who were unable to telework were less resilient during the pandemic due to facing challenges such as financial issues, lockdowns, and restrictions. Although several new support measures were implemented in both countries during the pandemic, the interviews revealed that several of the self-employed people in hard-hit industries were displeased with the measures, and perceived them as unfairly distributed and that larger businesses received more assistance. In addition, reduced well-being was reported in the self-employed who experienced financial hardship. This had in turn a negative effect on their resilience and ability to run the business.

Potential future policy responses in arctic countries to support self-employed people during crises or adversity should consider the diversity of small businesses and tailor programmes to viable businesses that have the greatest need for support, such as those in businesses that are not amenable to telework. In addition, support measures should ensure that small businesses benefit from policies to the same degree as larger businesses. With regard to Canada, continuing unemployment insurance for the self-employed after the pandemic could ensure that self-employed people do not fall outside the social security system and thus lower the barrier for people considering self-employment [92]. All arctic countries should view support targeted at viable small businesses as an investment in a flexible workforce rather than as lost resources [93].

Acknowledgments

The authors would like to thank the self-employed people who participated in the study and the anonymous reviewers for their insightful comments and suggestions.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

We are unable to make the transcripts publicly available owing to sensitive data and participant privacy concerns. However, the data that support the findings of this study are available on request.

Additional information

Funding

This work was supported by AFA Insurance, Sweden. Grant number [200235].