Growth in self-employment is an established trend predating the economic downturn of 2008-09, an article published today by the Office for National Statistics concludes.
The level of self-employed workers in the UK increased from 3.8 million in 2008 to 4.6 million in 2015. Its share of overall employment rose from 11.9% in 2001 to 13.0% just before the downturn and 14.6% in 2015 – a rise of 1.6 percentage points. Of this, 1.2 percentage points came from the part-time self-employed workers. The article finds that self-employed older workers are much more likely than their younger colleagues to make the transition from full-time to part-time working, and account for a larger portion of the growth in this employment mode in recent years. This rarely involves a change of industry and occupation, and is consistent with workers managing their retirement in a different manner. A larger number of workers appear to be choosing part-time self-employment rather than retiring directly, the article finds.
Some trends are common to both full- and part-time self-employment. Both groups of workers have seen their age profile get markedly older in recent years, both are increasingly concentrated in the finance and business services industry (which now accounts for nearly 25% of full-time, and nearly 30% of part-time self-employment). Both groups are relatively concentrated in higher occupational groups and in the South East and London, with full-time self-employed workers in particular becoming more concentrated in the capital (which now accounts for about 17% of full-time self-employment, compared with less than 15% in 2001).
The article suggests that self-employed workers are broadly content with their position in the labour market, with little evidence of older part-time self-employed workers wanting a full-time position, of job search or dissatisfaction with being self-employed. Among younger and mid-aged self-employed women, the growth in self-employment has not been accompanied by a rise in the number of people who would prefer to work full-time, nor a clear uptick in the number of workers seeking an alternative job. Among younger part-time self-employed men, however, the picture is less certain. Larger portions of these workers display a greater degree of dissatisfaction with their part-time status and appear to have come directly from unemployment – possibly indicating a choice made under economic hardship. It is among these workers that evidence of under-employment is strongest.
Background Notes
The report is on the ONS website at: https://www.ons.gov.uk/releases/trendsinselfemployment
People are self-employed if they run their businesses for themselves and take responsibility for its success or failure. Self-employment can be in the form of a sole trader, a partnership (two or more people who run a business) and an owner of a limited liability company (also responsible running the business). The split between full-time and part-time self-employment is based on Labour Force Survey respondents' self-classification.
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