Self-employed

Evidence base 2014

PurposeThis slide-pack aims to provide a broad evidence-base on self-employment in the UK. Drawn predominantly from the Labour Force Survey, the pack ties together characteristics of the self-employed, their working patterns, earnings and geographical information.

2

SummaryComposition

1. Self-employment has been a growing part of the labour market for the past 30 years, and as of Q2 2014 makes up 15% of total UK employment

2. However, the UK is still below the European averages for both male and female self employment rates

3. Women are a growing part of the self-employed population, now making up nearly a third of self-employed

4. Part-time self-employment is also growing, driven largely by more self-employed women

5. Females account for just under one-third of self-employment

6. Rise in the proportion of females is due to stable inflows and a reduction in outflows

7. Female self-employed tend to work less hours than male self-employed

8. Self-employment is more prevalent among older people; around 40% of 65+ year olds who work are self-employed

Business composition

1. In 2014 there was a record level of private sector businesses; increases since 2001 track self-employment growth

2. The composition of the UK private sector business population has seen big increases in the proportion of businesses with no employees since 2000

3

SummaryInvoluntary self-employment

1. The self-employed are less likely to look for additional work than employees

2. Self-employed are also involuntarily part-time at lower rates than employees

3. Self-employed are more likely to have multiple paid jobs than employees

4. The self-employed are less likely to look for additional work than employees

Mechanism behind rising stocks

1. Rises in self-employment appear due to people staying self-employed for longer, rather than more people becoming self-employed

2. The length of service of both employees and self-employed has increased since 2008

Type of work

1. Around one-fifth of self-employed work in construction, however self-employment saw the biggest reduction in this sector post-recession

2. Self-employed tend to work in higher-skilled occupations

3. Self-employed do less shift-work than employees, and are more likely to work from home than employees

4

SummaryGeography

1. Self-employment is spread across the UK countries in similar proportions to employees

2. London has the highest concentration of self-employment

Hours and absences

1. On average self-employed people work more hours per week compared to employees, however this gap has halved since 2006

2. Self-employed also tend to work a wider variety of number of hours per week, employees cluster more around 36-40 hours

3. A slightly lower proportion of self-employed take sick days compared to employees

5

Evidence slides

6

The UK is below European averages for male and female self-employment rates between the ages of 20-64

7

Total, male and female European

averages

** Data from Eurostat published data

8

9

** Data from LFS Q2 using 2014 weights

Self-employed made up 12.8% of total employment

in 2004

 

10

Recent growth in self-employment is part of a longer trend …

• Over the last 13 years, the number of people reporting themselves as self-employed in the UK has increased by 40%.

• In 2013, they represented about 10% of the UK population.

• The trend in the adjusted measure (excluding those identified as not technically self-employed) is similar to the trend for the overall self-reported measure.

• The adjusted measure is around 470,000 less on average.

11

 

12

** Data from LFS Q2 using 2014 weights

13

Inflows and outflows from female self-employment between 1994, 1999, 2004, 2009, 2014

Self-employment status   1994 1999 2004 2009 2014

Thousands

(a) Total self-employment 890718 881117 970017 1080994 1454813

(b) Self-employed for less than 5 years (inflow) 433480 414138 435307 490024 611500

(c) Self-employed for more than 5 years 457338 466979 534710 590970 843313

(d) Increase/decrease from last period -9601 88900 110977 373819

Outflow       423739 346407 379047 237681

Percentages

Inflow % 47.00% 44.88% 45.33% 42.03%

Outflow%       47.57% 39.31% 39.08% 21.99%

1 Self-employed people who did not state how long they have been self-employed have been apportioned to the table according to the proportions of those who did2 Datasets used are for April to June 1994, 1999, 2004, 2009 and 2014 3 This is the difference between the total number of people self-employed for a given year and the total number of people self-employed 5 years earlier (eg. For 1999 this is (a) 1999 – (a) 1994).4 Outflows (e) are calculated by (b) – (d).5 Percentage of self-employed people each year who had entered within five years (eg. For 1999 this is (b) 1999 / (a) 1999).6 Percentage of people who had left self-employment compared with five years earlier (eg. For 1999 this is (e) 1999 / (a) 1994).

Rise in female self-employment due to a recent reduction in outflows

14

15

** Data from LFS 2014 Q2 using 2014 weights

16

** Data from LFS 2014 Q2 using 2014 weights

17

** Data from LFS 2014 Q2 using 2014 weights

18

• The increase of 1.8 million (up 51%) in the business population since 2000 tracks self-employment growth.

• This includes people self-employed in either first or second jobs (based on the adjusted measure excluding mis-reporting)

• Many (but not all) self-employed are non-employers, and the trend is most similar for this group

Composition of the UK private sector population has changed over time

19

• Non-employers include self-employed without employees and sole director companies

• 31% growth in sole directors companies since the start of 2010

• 19% growth in non-employing businesses with self-employed owners

20

21

22

23

Self-employed and employees show similar proportions of qualifications and years of schooling

** Data from LFS Q2 2014 using 2014 weights

24

** Data from LFS Q2 2014 using 2014 weights

* NOTE: refers to part-time workers who couldn’t find full-time work

Involuntary part-time work has increased for both self-

employed and employees since 2004

Proportions of part-time employees/self-employed who want full-time work

25

26

** Data from LFS Q2 using 2014 weights

A smaller percentage of self-employed had been working in the

same job for a short period (3.5 years or less) in 2014 compared to

2008

27

28

29

1 Self-employed people who did not state how long they have been self-employed have been apportioned to the table according to the proportions of those who did2 Datasets used are for April to June 1994, 1999, 2004, 2009 and 2014 3 This is the difference between the total number of people self-employed for a given year and the total number of people self-employed 5 years earlier (eg. For 1999 this is (a) 1999 – (a) 1994).4 Outflows (e) are calculated by (b) – (d).5 Percentage of self-employed people each year who had entered within five years (eg. For 1999 this is (b) 1999 / (a) 1999).6 Percentage of people who had left self-employment compared with five years earlier (eg. For 1999 this is (e) 1999 / (a) 1994).

Inflows and outflows from self-employment between 1999, 2004, 2009 and 2014

 

Self-employment status 1994 1999 2004 2009 2014

Thousands

(a) Total self-employment 3,376 3,311 3,654 3,814 4,597

(b) Self-employed for less than 5 years (inflow) 1,300 1,184 1,385 1,453 1,672

(c) Self-employed for more than 5 years 2,077 2,128 2,268 2,361 2,925

(d) Increase/Decrease from last period3 … -65 342 160 782

(e) Outflow4 … 1,249 1,043 1,293 890

Percentages

(f) inflow rate5 … 36% 38% 38% 36%

(g) outflow rate6 … 37% 32% 35% 23%

**Data from LFS Q2 using 2014 weights

Increase in self-employment stocks due to stable inflows and decreasing outflows

Increases over time of levels of self-employed people is due to more

people entering self-employed than leaving (rather than people entering

self-employment at a faster rate than previously

30

31

32

A lower proportion of self-employed do shift-work compared to employees

** Data from LFS Q2 2014 using 2014 weights

33

**Data from LFS 2014 Q2 using 2014 weights

Self-employed Employees

Self-employed tend to work from or very near to home at much higher rates than employees

34

Distributions of employed/self employed comparable across UK countries

** Data from LFS 2014 Q2 using 2014 weights

Self-employed employee

35

London has the highest concentration of self-employment

Data taken from LFS 2014 Q2 using 2014 weights

Composition of employment by region

36

37

** Data from LFS Q2 2014 using 2014 weights

A higher proportion of self-employed reside in the UK's south as compared to employee distribution

Self-employed employees

38

39

40