1. Self-employed Evidence base 2014

2. Purpose This 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

3. Summary Composition 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

4. Summary Involuntary 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

5. Summary Geography 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

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7. 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

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9. 9 ** Data from LFS Q2 using 2014 weights Self-employed made up 12.8% of total employment in 2004

10. 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.

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12. 12 ** Data from LFS Q2 using 2014 weights

13. 13 Inflows and outflows from female self-employment between 1994, 1999, 2004, 2009, 2014 Self-employment status 19941999200420092014 Thousands (a) Total self-employment89071888111797001710809941454813 (b) Self-employed for less than 5 years (inflow)433480414138435307490024611500 (c) Self-employed for more than 5 years457338466979534710590970843313 (d) Increase/decrease from last period-960188900110977373819 Outflow 423739346407379047237681 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 did 2 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

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15. 15 ** Data from LFS 2014 Q2 using 2014 weights

16. 16 ** Data from LFS 2014 Q2 using 2014 weights

17. 17 ** Data from LFS 2014 Q2 using 2014 weights

18. 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

19. 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

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23. 23 Self-employed and employees show similar proportions of qualifications and years of schooling ** Data from LFS Q2 2014 using 2014 weights

24. 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

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26. 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

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29. 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 did 2 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 status19941999200420092014 Thousands (a) Total self-employment3,3763,3113,6543,8144,597 (b) Self-employed for less than 5 years (inflow)1,3001,1841,3851,4531,672 (c) Self-employed for more than 5 years2,0772,1282,2682,3612,925 (d) Increase/Decrease from last period 3 …-65342160782 (e) Outflow 4 …1,2491,0431,293890 Percentages (f) inflow rate 5 … 36%38% 36% (g) outflow rate 6 … 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

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32. 32 A lower proportion of self-employed do shift-work compared to employees ** Data from LFS Q2 2014 using 2014 weights

33. 33 **Data from LFS 2014 Q2 using 2014 weights Self-employedEmployees Self-employed tend to work from or very near to home at much higher rates than employees

34. 34 Distributions of employed/self employed comparable across UK countries ** Data from LFS 2014 Q2 using 2014 weights Self-employedemployee

35. 35 London has the highest concentration of self-employment Data taken from LFS 2014 Q2 using 2014 weights Composition of employment by region

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37. 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-employedemployees

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