Transcript Self-employed without personnel: between freedom and insecurity

Self-employed without personnel:
between freedom and insecurity
Project results
Wieteke Conen
Utrecht University School of Economics
Final Conference, Utrecht, 1 July 2016
Project results: bundled in WSI Study
Literature review/ LFS statistics
- Developments over time
Panel data
- Labour market transitions
- Impact of earlier life experiences
- Consequences
Survey data/ qualitative research
- Motives
- Work-life balance
- Pay-off
- Social security and pensions
- Role of governments and
interest organisations
 Final version will appear soon
Background and aim
• Recent decades show an increase in the number and
share of solo self-employed in many European countries
• Traditionally, self-employed considered ‘insiders’ fitting
the category of independent entrepreneurs, but
increasingly associated with ‘involuntary’, ‘dependent’ and
‘precarious’ self-employment (Schulze Buschoff and Schmidt, 2009;
Westerveld, 2012)
• Limited quantitative empirical knowledge about how this
group is faring, but many governments advocate further
self-employment growth (European Commission, 2010)
• Examine and explain precariousness and self-sufficiency
among solo self-employed.
Research question
For whom does self-employment result into a precarious
financial situation as opposed to who is rather well-off?
1. Identify who is to be classified as ‘precariously’ selfemployed and who is rather ‘self-sufficient’;
2. What are the determinants?
Contribution
• Self-employed regularly left out of empirical analyses;
• New light on relationship between self-employment and
pay-off with specifically designed survey data
Concept of ‘precariousness’ vs ‘self-sufficiency’
Point of departure: ‘good jobs/ bad jobs’ (Kalleberg et al. 2000)
• ‘Bad jobs’ are “those with low pay and without access to
health insurance and pension benefits” (pp. 256)
• Broadened and adjusted this concept to situation of solo
self-employed
‘Low pay’ (occupational level)  ‘low financial resilience’
(household level)
• Income notoriously hard to measure;
• Substantial share not or not completely dependent on
this income
Adjusted social security provisions
• Welfare states in Europe differ from situation in US
• Disability insurance does play substantial role
Step 1: Identify
Used our own survey data: N=1,550 (Germany: N=757;
Netherlands: N=793)
Financial resilience
• Gross annual household income
• Financial means to bridge a period without work
• Financial situation of household
Social security
• Disability insurance
• Supplementary pension
• Income after retirement
Hierarchical cluster analysis (Ward’s method/ squared
Euclidean distance) produced three clusters
Cluster descriptives
Cluster 1
Precarious
Cluster 2
Get by
Cluster 3
Self-sufficient
Far below
standard
Almost
standard
Towards 2x
standard
Less than a
month
About 3
months
About half a
year
Deficit
Get by
Surplus
Disability insurance
11%
21%
34%
Supplementary pension
29%
57%
83%
Income after retirement
Disagree
Neither agree,
nor disagree
Agree
12,6%
43,7%
43,8%
Financial resilience
Gross annual household income
Financial means to bridge a period
Financial situation of household
Social security provisions
%
Cluster analysis
Step 2: Determinants
To what extent do different factors contribute to ‘precariousness’
or ‘self-sufficiency’?
Supply side
• Motives to become solo self-employed
• Know-how
• Individual characteristics
Demand side
• Timing
• Clientele
• Industries characteristics
Institutional context
 Multinomial logistic regression analysis
Conclusion
• Classified solo self-employed into
o ‘precariously solo self-employed’ (12,6%),
o solo self-employed who ‘get by’ (43,7%)
o and ‘self-sufficient’ solo self-employed (43,8%);
• Especially solo self-employed who start from ‘push’
motives are less likely to be self-sufficient;
• Perceived financial knowledge positively affects the
probability of being self-sufficient;
• No difference between solo self-employed starting their
business before, during or after the financial crisis;
• ‘Destructive competition’ may play a role;
• Institutional context matters.
Discussion
• Comparison between for instance self-employed with and
without personnel or with those in standard and nonstandard employment relations;
• Low share insured against disability - even among selfsufficient;
• Future research: Mechanisms behind ‘push’ and
destructive competition.
• Where do ‘push’ motives come from? Employers and
industries, but also institutional changes?
• Destructive competition: does demand or supply side
deserve attention?
Thank you for your attention