Self-employment

Self-employment may be seen either as a survival strategy for those who cannot find any other means of earning an income or as evidence of entrepreneurial spirit and a desire to be one’s own boss. Self-employment rates reflect these various motives.

Definition

Employment is generally measured through national labour force surveys. According to the ILO Guidelines, employed persons are defined as those aged 15 or over who report that they have worked in gainful employment for at least one hour in the previous week or who had a job but were absent from work in the reference week.

Self-employed persons include employers, own-account workers, members of producers’ co-operatives, and unpaid family workers. People in the last of these groups do not have a formal contract to receive a fixed amount of income at regular intervals, but they share in the income generated by the enterprise; unpaid family workers are particularly important in farming and retail trade. Note that all persons who work in corporate enterprises, including company directors, are considered to be employees.

Rates are the percentages of the self-employed in total employment.

Comparability

All OECD countries use ILO Guidelines for measuring employment. Operational definitions used in national labour force surveys may, however, vary slightly across countries. Only unincorporated self-employed are included in self-employed in Australia, Canada and the United States. Employment levels are also likely to be affected by changes in the survey design, questions sequencing and/or the ways in which surveys are conducted. Despite this, self-employment rates are likely to be fairly consistent over time.

Overview

In 2014, the share of self-employed workers in total employment ranged from under 7% in Luxembourg and the United States to well over 30% in Brazil, Greece, Mexico and Turkey. In general, self-employment rates are highest in countries with low per capita income although Italy, with a self-employment rate of around 25%, is an exception. Ireland and Spain also combine high per capita incomes and high self-employment rates.

Over the period 2000-14, self-employment rates have fallen in more than two thirds of countries and by 2.4 percentage points in the OECD area. These falls have mostly occurred prior to the onset of the global financial crisis in late 2007. However the Czech Republic, the Netherlands, Slovenia and the United Kingdom saw moderate to strong increases and the Slovak Republic even had an increase exceeding 7 percentage points, albeit from low levels. Conversely, and starting from a higher level, there have been sharp declines in self-employment rates of 3 percentage points or more in Turkey, Korea, Greece, Portugal, Poland, Mexico and Italy but also in Australia, Hungary, Iceland, Japan, New Zealand, and Switzerland.

Levels and changes in total self-employment rates conceal significant differences between men and women. In 2014, only Mexico and Turkey recorded self-employment rates for women higher than those for men with many of them working as unpaid family workers. In the case of Turkey, almost 40% of all working women are self-employed, albeit down from 64.7% in 2000.

Sources

Further information

Analytical publications

Statistical publications

Websites

Table. Self-employment rates

 http://dx.doi.org/10.1787/888933336573

Self-employment rates: total
As a percentage of total employment
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 http://dx.doi.org/10.1787/888933335485