Who are the self-employed and what do they do?

Yesterday’s UK Labour Market Statistics show that the labour market continues to perform strongly, with the employment rate at near-record levels. The release also shows that the number of part-time self-employed has passed one and a half million for the first time – over double what it was twenty-five years ago.

This got me thinking: who are the self-employed and what do they do?

It’s clear that self-employment has played an important role in supporting the overall increase in UK employment levels over the past decade.

Chart 1 shows that self-employment has accounted for around one-third of the total employment increase.

In this blog, I’ll use some data from the Office for National Statistics’ official labour market statistical releases and Labour Force Survey (LFS) to take a look at the self-employed; and use the data to begin to uncover more about who they are and what they do; and how they compare to people who are employed.

A note on data: data from the official statistical release is taken up to the latest full calendar quarter – so in this case, January to March 2019. LFS analysis is undertaken on the January to March 2019 quarterly dataset.

Who are the self-employed? The rise in popularity amongst women

One of the most striking things about the recent rise in self-employment, is the rise in the popularity of self-employment amongst women.

For both genders, the numbers choosing self-employment has increased by roughly half a million each over the past decade, but this represents a much larger proportional increase for women: 51% vs 19%[1], between the first quarter of 2009 and the first quarter of 2019.

This could be driven by a variety of reasons, such as improvements in the technology needed for remote working, or a desire for more flexible work than an employer can offer.

[1] Office for National Statistics labour market statistical release, Jan-Mar 2009 – Jan-Mar 2019.

So, what do the self-employed do?

Chart 2 shows a breakdown of self-employment by occupation, by gender.

Self-employed women tend to work in professional, associate professional and caring & leisure occupations, whilst 35% of self-employed men are in skilled trades occupations (for example, plumbers, joiners etc.).

Looking at the data in more detail (at 3 digit level, for those familiar with the occupational codes) shows that popular occupations for self-employed women include: artistic, literary & media occupations (artists, authors, musicians, photographers etc.), hairdressing, elementary cleaning occupations and teaching & educational professionals.

Popular occupations for self-employed men include: construction and building trades, road transport drivers and agriculture & related occupations.

What kind of qualifications do the self-employed hold and how does this compare to employees?

Charts 3 and 4 below show that overall, the pattern of highest qualification held amongst the self-employed and employees is similar. However, a few things stick out from looking at the data:

• In general, self-employed men tend to be less well qualified than their employed counterparts. A lower proportion of self-employed men hold their highest qualification at level 4 (higher education) or above compared to male employees (35% vs 43%); whereas a slightly higher proportion of self-employed men have no qualifications (9% vs 5%).
• On the other hand, self-employed women tend to be better qualified that their employed counterparts. A higher proportion of self-employed women hold their highest qualification at Level 4 or above compared to female employees (52% vs. 48%). The proportion of self-employed women holding no qualifications is the same as the proportion of female employees, at 4%.
• Self-employed women are more highly qualified than self-employed men: 52% of self-employed women hold their highest qualification at Level 4 compared to 35% of self-employed men.

What about age? Are the self-employed typically younger or older?

Self-employment for both genders tends to peak in the 50-54 age band. Charts 5 and 6 show that for both men and women, the age distribution amongst the self-employed is clearly further to the right compared to employees of the same gender.

This suggests that self-employment is more attractive to older, more experienced workers.

This could perhaps be driven by lifestyle change (a move to semi-retirement?) or down to natural career progression after working as an employee.

What can we take away from this brief look?

Self-employment has clearly become a much more important form of work for women over the past decade.

Across both genders, self-employment is still concentrated in what many may see as ‘traditional’ occupations for the self-employed, particularly for men.

The self-employed are well qualified, women in particular; with over half of self-employed women holding a qualification at Level 4 or above as their highest.

The data suggest that self-employment isn’t the preserve of those with no or low qualifications who would not be able to find work in a competitive labour market – it is a conscious choice made by (some highly) skilled people.

What is also clear is that self-employment is largely the preserve of the older and more experienced and it would be interesting to understand more about why this is.

Is this because younger people prefer to work for someone else, or could it be that young people face barriers to self-employment that policy measures could address?

Self-employment plays an important role in our economy and labour market. The data help paint a picture of the people behind the statistics – is that picture one we are happy with? Is there more to the story than meets the eye?

If you’d like to find out more about how we can help you understand the key drivers of change in the labour market please contact me.  To read more about the kinds of questions we can help you answer, see our Jobs & Skills page.