(waiters, bar staff etc) are regarded as self-employed rather than employed.
3.2.3 Hours of work
It is a common and popular stereotype that entrepreneurs, and small business owners, and more generally, those who work for themselves, tend to work longer and harder than those who work for other people. Tables 3.10 and 3.11 below, which show, for men and women respectively, the distribution of usual weekly hours of employed and self-employed respondents to the ELFS in 1989, tend to confirm this perception.
Table 3.10: Usual hours of work, by employment status (Males: 1989)
Usual weekly working hours {% of respondents with given hours)
1-19 20-29 30-39 40-49 50-59 60f highly variable not given Total
D Self-employed 2.2 2.0 6.0 23.7 19.1 46.9 0.0 0.0 100.0
Employed* 0.8 0.9 49.4 41.8 3.8 3.3 0.0 0.0 100.0
F Selfemployed 1.6 0.6 3.6 13.3 14.8 27.7 38.4 0.0 100.0
Employed* 1.7 2.9 • 53.4 23.3 4.8 3.1 10.8 0.0 100.0
I Selfemployed 1.7 2.0 6.7 53.4 18.7 13.7 3.7 0.2 100.0
Employed* 2.2 1.7 25.1 65.4 3.0 1.6 0.9 0.1 100.0
NL Selfemployed 8.4 4.4 5.5 13.8 20.6 47.3 0.0 0.0 100.0
Employed* 8.8 4.4 48.9 35.1 1.3 1.5 0.0 0.0 100.0
B Selfemployed 0.7 0.6 3.1 18.3 17.5 33.2 26.6 0.0 100.0
Employed* 0.8 3.7 64.6 26.1 1.6 1.7 1.6 0.0 100.0
UK Selfemployed 3.7 2.7 9.5 34.0 20.6 29.2 0.0 0.4 100.0
Employed* 3.1 IS Z4S 46.7 15.8 7.6 0.0 0.9 100.0
IRL Self-employed 0.5 1.8 3.4 16.6 14.3 47.9 15.2 0.2 100.0
Employed* 1.4 2.8 15.2 60.4 6.3 6.2 7.3 0.4 100.0
DK Self-employed 2.7 2.7 9.5 17.0 21J 32.2 14J 0.0 loao
Etnployed* IS 1.7 74.0 9.0 3.9 1.9 2.0 0.0 100.0
GR Selfetnployed 0.8 IJ 5.3 48.8 16.0 27.3 0.3 0.0 100.0
Enqdoyed* 0.8 4.2 22.6 63.6 4.3 4.3 0.1 0.0 100.0
P Selfemployed 1.8 2.1 3.3 34.8 15.8 30.7 IIJ 0.0 100.0
Employed* 0.7 IJ 10.6 77.0 3.3 3.7 3.7 0.0 100.0
E Selfemployed 0.8 1.3 4.1 58.7 18.0 17.0 0.1 0.0 100.0
Employed' OJ 0.8 7.8 83.9 3.7 3.1 0.1 0.0 100.0
* "Employed" consists of employees together with unpaid family workers Source: own calculations from ELFS
For both men and women, and in both countries, it is clear that the self-employed work longer hours on average than do their counterparts in dependent employment. These differences are, moreover, not slight ones - a notable feature of the tables is the high proportion of self-employed claiming to work extremely long hours on a regular or usual
basis. Thus, for example, among self-employed men the proportion usually working 60 hours or more per week varies from 14 per cent (in Italy) to 47-48 per cent (in Germany, the
Netherlands and Ireland).
Table 3.11: Usual hours of work, by employment status (Females: 1989)
Usual weekly working hours (9I of respondents with given hours)
1-19 20-29 30-39 40-49 50-59 60f highly variable not given Total
D Self-employed 11.0 12.1 IIS 28.2 12.3 24.9 0.0 0.0 100.0
Employed' 9.0 17.8 40.2 29.1 IS 2S 0.0 0.0 100.0
F Self-employed 4.1 5.7 9.4 18.7 12S 17.1 30.6 0.0 100.0
Employed* 7.6 12.3 52.9 14.1 2.2 2.0 7S 0.0 100.0
I Self-emidoyed 45 6.3 14.5 51.0 10.9 9.2 3.1 OS loao
Employed* 7.4 12.1 29.8 46.0 IS IS 1.2 OS 100.0
NL Self-employed 52.3 14.1 9.0 9S 6.7 8.4 0.0 0.0 100.0
Employed* n . i 19.0 31.7 15.6 0.4 0.6 0.0 0.0 100.0
B Self-employed 4.6 6.6 8.0 23.7 16.7 22.3 18.2 0.0 100.0
Employed* 10.4 20.0 50.9 13.2 1.3 2.2 2.0 0.0 100.0
UK Self-enjoyed 29.1 13.8 15.2 18.8 8.3 14S 0.0 0.4 loao
Employed* 23.8 16.2 35.3 20.0 3.1 1.1 0.0 OS 100.0
IRL Self-employed 6.8 7.4 9.7 27.3 10.8 24.6 12.9 0.4 100.0
Enqjioyed* 7.8 11.1 25.5 48.1 1.9 1.5 3.7 0.3 100.0
DK Self-employed 6.1 7.7 13.1 18.7 17S 23.6 13.2 0.0 100.0
Employed* 13.7 17.0 60.5 4.9 1.7 0.6 IS 0.0 100.0
GR Self-employed 4.2 4.9 16.7 45.4 14.0 14.3 0.4 0.0 100.0
Employed* 3.2 9.0 23.6 50.3 6.2 7.6 0.1 0.0 100.0
P Self-employed 3.7 4.9 9.6 24.7 14.8 37.0 5.3 0.0 100.0
Employed' 5.3 8.7 20.4 57.6 2.4 3.3 2.4 0.0 100.0
E Self-employed 4.3 5.1 9.4 59.3 11.0 10.9 0.1 0.0 100.0
Employed* 5.1 6.4 18.2 64.6 2.8 2.6 0.1 0.0 100.0
* "Employed" coiuists of employees together wiili unpaid family workers Source: own calculations from ELFS
Among dependently employed men, by contrast, the proportion working such long hours varies from a mere 1-2 per cent (in Italy, the Netherlands, Belgium and Denmark) to 6-8 per cent in Ireland and the UK. In all countries (with the exception of Portugal, where the gender patterns are similar), women (whether self-employed or dependently employed) tend to work
shorter hours than their male counterparts on average^', but the sharp difference between
self-employed and employed working hours remains. Thus between 8 per cent (in the Netherlands) and 37 per cent (in Portugal) of self-employed women work 60 hours per week or more, whilst the same is true of only between 1 per cent (in the UK) and 8 per cent (in Greece) of dependently employed women.The tables also show that the hours of self-employed people tend to be more variable than those of the dependently employed, since in many countries a signiflcant proportion of the self-employed are unable to give their "usual" hours, because working time varies considerably between week to week or month to month'". This is of some interest, given the lack of income data, in that whilst it does not necessarily imply that the income of the self-employed is variable, it is reasonable to assume, for the self-self-employed, that their remuneration may often be closely and directly tied to their volume of business and their hours worked".
Hence these data may also be consistent with the argument that the livelihood of the self-employed is often more variable and precarious than that of their counterparts in dependent employment.
Table 3.12 summarises some of the changes in working time which occurred during the period 1983 - 89. In the majority of cases, the proportion of self-employed both (men and women) working "long hours" (defined here as 50 hours or more a week) fell over the period.
The recent trend for the working time of the self-employed to fall, and to become closer to that of the dependently employed has been noted by other authors researching self-employment in particular countries (see, for example. Gout and BUchtemann 1987, for Germany, and Aronson I99I for the USA). What is unclear at this stage, is how far this trend is due to compositional factors {Gout and BUchtemann 1987, for example, claim that the fall in the number of self-employed Germans working over 45 hours per week ".. is entirely due to the fall in the number of self-employed farmers, who are traditionally characterised by very long working hours" - our translation), and how far it is due to behavioural changes among the self-employed. As far as the latter is concerned, Aronson 1991, for example, discussing the decline over time in the earnings of self-employed Americans relative to their dependently employed counterparts, notes that
"... the average number of hours worked per week by the self-employed now closely approximate those worked by wage and salary workers. It is possible, thus, that the
The difference is particularly marked in the case of the Netherlands where there are exceptionally large proportions of women (both employed and self-employed) working very short hours (fewer than 20 per week).
In some countries the percentage stating that their hours were highly variable in this mannger is given as zero or negligible, but this seems to be due to differences in the methodology of the individual national surveys, some of which do not allow this option as a response, rather than to any substantive differences.
" This need not be the case in all circumstances, of course, thus it is possible to
envisage the self-employed in some types of activity putting in more hours during a period of business downturn, simply in order to maintain the same level of target income.decline in the relative earnings of the self-employed may be attributable in some part to a change in their work-leisure preferences in favor of an increase in leisure or nonwork time" {Aronson 1991 pp 48-49).
Aronson goes on, however, to note contrary evidence suggesting the opposite trend, and the opposite explanation.
Table 3.12:"Long hours " working by employment status (1983 and 1989)
% of respondents usually working 50 hours or more per week
1983 1989
Self-employed Employed* Self-employed Employed*
Germany Males 71.2 6.9 66.0 7.1
Females 45.9 5.8 37.2 4.0
France Males 49.4 6.2 42.5 7.9
Females 36.3 5.1 29.6 4.2
Italy Males 23.7 3.2 32.4 4.6
Females 14.5 2.5 20.1 3.2
Netherlands Males 71.5 6.1 67.9 2.8
Fentales 23.3 2.4 15.1 1.0
Belgium Males 69.0 4.0 50.7 3.3
Females 47.7 5.6 39.0 3.5
UK Males 51.3 17.3 49.8 23.4
Females 22.7 2.4 22.8 4.2
Ireland Males 59.9 11.0 62.2 12.5
Females 36.9 3.5 25.4 4.4
Dcnmaric Males 50.7 6.0 53.7 5.8
Females 29.5 2.4 41.1 2.3
Greece Males 46.3 10.8 43.3 8.6
Females 33.8 19.5 28.3 13.8
Portugal Males - - 46.5 7.0
Females - - 51.8 5.7
Spain Males - - 35.0 6.8
Females - - 21.9 5.4
+ "employed" consists of employees together with unpaid family workers Source: own calculations from ELFS
In the case of women, moreover, much of the fall in hours among the self-employed can be attributable to the steady growth of part-time work among the self-employed in many European countries. This trend {Maier 1991) has been well-documented among the dependently employed, and is at least in part due to growing female participation in the labour force, especially during child-rearing ages, and the associated demand for part-time and flexible working schedules.
It is, however, important to note also, that among EC member states, this trend towards a reduction of long hours working among the self-employed is by no means universal - in Italy in particular the proportion of both men and women self-employed working 50 or more hours per week grew strongly over 1983-89, as it did to a lesser extent among Danish men and women, and among Irish men. The reasons for these varied trends cannot easily be
ascertained from the ELFS information.
3.2.4 The self-employed and work-related training
An issue commonly raised in the context of the recent growth in self-employment in some countries is that of training. Whilst in some countries, it is common for the self-employed in many activities to have received a considerable amount of work-related training (indeed, as we have already noted, in some sectors in Germany it is virtually a pre-requisite for self-employment entry), most of this training is typically received in dependent self-employment prior to self-employment entry. What is unclear, however,is how far the self-employed are able to secureongoing training for themselves, whether in business skills, or in theirchosen activities.
Indeed in the UK where self-employment has grown fast, it has been argued by previous researchers, that in sectors such as construction, the expansion of self-employment has gone hand in hand with a reduced volume of work-related training, as the uaining which was previously provided by employers has not been taken over by the newly self-employed themselves (see Evans and Lewis 1989).
Table 3.13 throws some light on this question using the ELFS data on work-related training.
These data have been previously analysed for dependent employees only or for total employment (see Auer 1992, Reissert 1991, and Commission of the European Communities 1991). When the analysis is repeated for the self-employed, it confirms the expectation that on average the self-employed in each country receive less training than do the dependently employed - in all member states for which the data are available, the proportion of the self-employed receiving work-related training (during the four weeks prior to the survey) is much lower than the corresponding proportion of the employed. This would appear to reinforce the notion, then, that other things being equal, a shift in thestructure of employment towards self-employment and away from dependent self-employment might lead to a reduction in the overall volume of workforce training. One possible explanation for the difference is that the data include the youngest age groups. As we have already seen (see section 3.1 above), self-employment rates among these youngest groups are low or negligible in most countries. It is, moreover, the case that a relatively high proportion of people in these groups (under the age of 20) are involved in apprenticeships or other forms of initial workforce training, normally associated with dependent employment Table 3.13 shows that when these youngest groups are removed from the data, leaving 20-49 year old, the proportion of self-employed receiving training is unaffected, but the proportion of dependently employed receiving training falls.
Training intensity remains considerably higher among the employed than the self-employed, however, showing that the difference between the two groups is not simply due to the effect of initial training among youths - adult self-employed in all countries receive less continuing or further training than do their dependently employed counterparts.
Table 3.13: Work-related training and employment status (1983 and 1989)
% of respondents receiving training related to economic activity during four weeks prior to survey
1983 1989
Persons aged 14-49 Persons aged 14 - 49 Persons aged 20 - 49 Self- EmployetT
employed
Self-employed
Employed*
Self-employed
Employed*
Gennany German data for 1983 not available on comparable basis
4.7 12.9 4.6 8.3
France 1.5 4.3 1.4 4.6 1.4 3.4
Italy 1.6 2.8 1.6 2.5 1.6 2.3
Netherlands 9.0 16.8 15.0 24.4 13.9 22.6
Belgium 2.3 3.7 1.7 3.0 1.8 2.6
UK 3.8 12.3 6.8 20.0 6.6 17.6
Ireland >i< 8.6 * 8.9 * 7.1
Denmark 4.2 14.7 8.8 21.7 8.9 19.8
Greece * 2.0 0.5 2.3 0.4 2.1
Portugal - - 0.5 1.7 0.5 1.8
Spain - - 0.8 3.0 0.8 2.8
* indicates cell sizes too small for reliable estimates to be made
+ "employed" consists of employees together with unpaid family workers NB: people aged SO and over are excluded from these data
Source: own calculations from ELFS
the dependently employed, also have high rates of training among the self-employed. Thus for both the self-employed and the dependently employed, the Netherlands, Denmaric and the UK" stand out as having a high incidence of training. The table also shows that these
This relatively high incidence of training in the UK has also been noted by other commentators (see Reissert 1991 and Auer 1992), and runs counter to the traditional perception of the UK as a training-deficient country. This apparent anomaly remains unexplained, but various hypotheses have been put forward; thus some have argued that this
(continued...)
countries are also notable for having recorded very rapid growth in the incidence of training during the 1980s (over 1983 - 1989), and that Ais growth was, if anything, rather more notable among the self-employed than among the employed.
3.2.5 The self-employed and job search
The ELFS has few variables on which the "welfare" of the self-employed can be compared with that of the employed, but one crude indicator of "satisfaction" which is available from the survey is whether the individuals in question are looking for alternative employment
Table 3.14: Job-search activity by employment status (1983 and 1989)
% of respondents looking for another job at time of survey
1983 1989
Self-employed Employed"^ Self-employed Employed*
Germany 0.8 1.8 1.4 2.6
France 1.9 5.1 1.8 7.5
Italy 1.8 3.7 2.3 5.3
Netherlands 3.4 7.9 6.0 11.3
Belgium 2.2 3.7 ♦ 2.8
UK 3.5 5.2 4.0 7.4
Ireland 4.2 5.7 3.0 6.5
Denmark * 4.4 1.3 6.2
Greece 2.5 5.6 1.5 4.4
Portugal - - 1.2 3.6
Spain - - 2.1 2.7
''' indicates cell sizes too small for reliable estimates to be made
+ "employed" consists of employees together with unpaid family workers
Source: own calculations from ELFS
Table 3.14 shows, that in all member states, for which the detailed data are available, the
^^(...continued)
high (further) training incidence is in part "compensatory" for deficiencies in the basic education and initial training systems; whilst others have argued that the high and (rapidly growing in the 1980s) incidence reflects a high rate of induction training associated with high levels of labour turnover. Neither of these hypotheses are convincing explanations of why the UK's training incidence is also much higher than the EC average among the self-employed,
however.
proportion of the self-employed at the time of the survey who were searching for another job
was considerably lower than among the dependently employed. There are, of course, other
possible interpretations of these data, and one should be cautious in reading too much into them. It is possible, for example, that they reflect differences (actual or perceived) in the job opportunitystructuresfacing employedand self-employed people. The different age structures of the two groups may also be relevant; we have noted that in all countries the self-employed are on average considerably older than the dependently employed, and it is also well-documented in most countries that voluntary job turnover declines with age. Further, it is possible that the concept of "looking for another job" has a rather different meaning for a self-employed person than it does for an employee (thus for the former it may be interpreted as a change in employment status, whereas for the latter, it need not).The consistent pattern is neverthless of some interest, and the fact that in nearly all cases the proportions of employees and self-employed engaged in job search moved in the same direction between 1983 and 1989 (i.e. they increased, as would be expected under declining levels of unemployment), is consistent with the variable having the same interpretation for the two groups. The table provides at leastprimafacie evidence, therefore, of apparent greater satisfaction with the current working situation among the self-employed than among employees.
3.3 Reg;ional variations in self-employment
In this final section, we briefly examine regional variations in the rate of self-employment in EC countries. Clearly direct comparisons between individual countries is difficult, since the regional disaggregations used in official statistics, and in the ELFS reflect administrative and governmental structures within the countries in question, rather than any EC-wide notion of what constitutes a region. It is clear, however, that in all the countries for which data are available, there is considerable regional variation. Using 1989 data, for example, the regional variation seems to be particularly large in France (varying from 7.9 per cent in the lie de France to 18.0 per cent in the Sud-Ouest region) and the UK (from 9.1 per cent in the Northern region, to 16.1 per cent in the South West. Germany and Italy, by contrast have rather less variation between regions.
How might we explain such regional variations? As argued in Meager, Kaiser and Dietrich 1992, two obvious explanations are rooted in variations in the industrial structure between regions, and variations in labour market tightness between regions.
Looking first at industrial structure, we have seen above that self-employment rates vary a lot between industries and it is likely, therefore, that a region with an industrial structure skewed towards the service sector or agriculture would exhibit a relatively high self-employmentrate, whilst regions with a high concentration of manufacturing industries would have relatively lower rates. Examination of the data on a country-by-country basis provides some support for such an explanation. As argued from a detailed Anglo-German comparison in Meager, Kaiser and Dietrich 1992, however, such variations in the industrial structure, although important can explain only part of the variations in regional self-employment rates.
Table 3.15: Regional self-employment rates (1983 and 1989)
Region 1983 1989 Region 1983 1989 Region 1983 1989
Saailand • 7.6 He de Prance 7.6 7.9 Sicilia 27.3 26.6
Berlin (W) • 9.3 Bassin Porisien 12.6 12.4 Sordegna 28.8 27.4
Sddeswig-Holstein * 9.0 Nord-Pbs-de-Calais 8.8 9.3 Nord-Ovest 23.8 24.7
Hamburg * 8.7 Est 8.8 9.3 Lombaidia 18.9 20.5
Niedeisachscn « 9.0 Guest 18.0 15.7 Nord-Est 23.6 23.6
Bremen * 7.9 Sud-Ouest 19.8 18.0 Emilia-Romagna 27.2 28.6
Ncrdrhein-Westfalen • 8.2 Centre-Est 14.4 13.6 Ceniro 25.5 27.7
Heasen • 9.1 M^leiran^e 15.9 16.1 Lazio 21.3 21.3
Rheinland-Pfalz * 9.1 All regions 12.8 I2J Campania 24.4 25.9
Baden-WQmemberg • 9.1 IWITED KINGDOM 1983 1989 Abtuzzi e Molise 33.3 31J
Bayem • 10.7 Scotland 7.9 9.8 Sud 24.8 24J
All regions • 9.1 Noithem Ireland 13.7 14.7 All regions 23.9 24.6
NETHERLANDS 1983 1989 North 7.7 9.1 GREECE 1983 1989
Nocrd 11.7 11.9 Yorks & Humber 8.9 12.1 Northern 0 37J
Cost 10.8 10.6 E Midlands 10.2 12.0 Central 0 42.4
West 9.4 10.0 East Anglia 11.9 15.7 Attica 0 24.2
Zuid 8.6 9.3 South East 10.5 14.6 Islands * 40.8
All regions 9J 10.0 South West 13.7 16.1 All regions 0 34.3
BELGIUM 1983 1989 W Midlands 9.4 12.2 SPAIN 1983 1989
Rdgion flamande 14.8 15.3 North-West 9.6 12.0 Noroeste • 30.4
Region wallonne 14.4 16.6 Wales 12.1 15.1 Nordeste • 22.3
Region bruxelloise 15.1 20.2 All regions 10.2 13.2 Madrid • 11.9
All regions 14.7 16.1 PORTUGAL 1983 1989 Centro • 30.0
Indicates data not available at a
levelfor the year in question
regional Norte
Source: Own calculations from ELFS
Ilhas • 21.0 Canorias • 16.7
All regions « 26.3 All regions • 21.6
Turning to the second factor, labour market tightness, the picture is a complex one. There is a long and somewhat inconclusive debate in the academic literature about the extent to which high levels of unemployment and a lack of opportunities for wage employment constitute a
"push" for people to enter self-employment. We consider this debate in more detail in Chapter 4 below. For present purposes, however, it is sufficient to note in the regional context, that whilst on the one hand a depressed local economic climate may provide an incentive for
people to enter self-employment, it may also on the other hand act as a constraint on establishing a thriving business enterprise. Any relationship across regions between unemployment and self-employment, therefore, will depend on which of these two factors is
dominant.
Cross section regional regression analysis in Meager, Kaiser and Dietrich 1992 which included variables for regional industrial structure and regional unemployment rates, suggested that the former (and particularly the significance of agriculture in the regional economy) were the dominant factor influencing regional self-employment rate differentials - the effect of the unemployment rate was negative and statistically insigniHcant. This analysis is repeated for the 5 largest EC countries (using 1989 ELFS data) in Table 3.16.
Table 3.16: Regional regressions (dependent variable: regional selfemployment rate -1989)
Germany UK Italy France Spain
Constant 6.86 3.81 46.81 -6.09
Independent variahles
regional imemployinent rate -0.27 C2.7) -0.51 (16) 0.13 (0.9) 0.22 (0.5) -0.13 (0.7)
% of legional employmem in agriculture
0.29 (1.8) 0.95 (i6) 0.10 (0.6) 0.98 (4.7) 053 (3.3)
% of regional employinent in
services
0.05 (1.7) 0.17 (1.2) -0.41 (2.) 0.18 (1.5) -0.32 (2.1)
R' 0.67 0.69 0.77 0.88 0.96
n 11 11 11 8 6
Absolute t-values in parentheses Source: European Labour Force Survey
The picture shown in the table is a mixed one - it confirms, firstly that there is no universal relationship between regional unemployment and self-employment rates. In the UK, Germany and Spain the relationship in 1989 is a negative one (suggesting that the effect of lower regional economic growth on self-employment more than outweighs any "unemployment push" effect), but only in the UK and Germany is it statistically significant. In Italy and France, the relationship is positive, but not statistically significant The most consistent finding is that in all five countries an higher proportion of regional employment in services
The picture shown in the table is a mixed one - it confirms, firstly that there is no universal relationship between regional unemployment and self-employment rates. In the UK, Germany and Spain the relationship in 1989 is a negative one (suggesting that the effect of lower regional economic growth on self-employment more than outweighs any "unemployment push" effect), but only in the UK and Germany is it statistically significant. In Italy and France, the relationship is positive, but not statistically significant The most consistent finding is that in all five countries an higher proportion of regional employment in services