Exploring self-employment in the European Union

Mathijn Wilkens

FOD Sociale Zekerheid

Brussels, 12 December 2018

2

Policy background

• Self-employment promoted to boost labour supply

• Is the nature of employment changing? – New, non-standard forms of employment– Employment status ambiguous– More precarious work?

• Sustainability of social protection systems

• European Pillar of Social Rights principle 12: Regardless of the type and duration of their employment relationship, workers, and, under comparable conditions, the self-employed, have the right to adequate social protection.

3

Self-employment stable overall, but more without employees

Source: Eurostat (LFS)

Self employed

Self‐employed without employees

0

2

4

6

8

10

12

14

1619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

1220

1320

1420

1520

16

% of total employ

men

t in the EU

15

4

More self-employed in services, less in agriculture

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

%-p

oint

yea

rly c

hang

e in

the

shar

e of

sel

f-em

ploy

ed

Total

Public sector

Services Industry

Agriculture

Self-employed by sector (2015)

5

Country differences in trends

-10

-5

0

5

10

15

20

25

30

35Po

rtug

al

Cro

atia

Cyp

rus

Rom

ania

Hun

gary

Ital

y

Pola

nd

Ger

man

y

Irel

and

Sw

eden

Den

mar

k

Bul

garia

Aus

tria

Spa

in

Mal

ta

Lith

uani

a

Cze

ch R

epub

lic

Fran

ce

Bel

gium

Slo

vaki

a

Gre

ece

Finl

and

Esto

nia

Uni

ted

Kin

gdom

Slo

veni

a

Luxe

mbo

urg

Latv

ia

Net

herlan

ds

%

2008

2015

%point change in self-employed without employees

Share of self-employed

(total)

No changeIncrease

Decrease

Source: Eurostat (Labour Force Survey)

6

Why become self-employed?

7154 60

1024 20

15 17 164 5 4

Withemployees

Withoutemployees

All self-employed

Neither of thesereasons

A combinationof both

No otheralternatives forworkMainly throughown personalpreferences

Source: Eurofound (European Working Conditions Survey 2015)

7

Clustering the self-employedSelf-employed, EU28, 2015

8

Stable own-account workers

8.3 million(26%)

Small traders and farmers8.0 million

(25%)

Employers7.4 million

(23%) Vulnerable5.4 million

(17%)

Concealed2.6 million

(8%)

EU28 workforce220.7M

(% within workforce)EU28 workforce 220.7 million

(% within workforce)

Self-employed32 million

(14%)

Employees188.7 million

(86%)

9

Stable own-account workers (26%)

99% does not employ staff

Opportunity, independent, autonomous 93% has more than

one client

12% self-employed out of necessity

90% able to take time off

10

Vulnerable (17%)Dependent, precarious, necessity

40% out of necessity

55% only one client

48% difficult to

find new clients

63% in lowest

income quintile

98% no training

11

Implications

• Majority of self-employed generally have good working conditions– Good job quality– Innovation and job creation?

• Self-employed are not always independent and autonomous– Worse job quality– Lack of social protection?– Lack of representation?

• Ambiguity regarding the self-employment status: dependence and subordination, but employee legislation does not apply

12

Social protection

Social protection and representation may be lacking• No unemployment protection in 11 member states• No insurance against accidents at work in 10 member

states• No sickness benefits in 3 member states• Take up of voluntary coverage ranges from 1% to 20%

(Source: Spasova et al, 2017)

13

Representation

Union representation may be lacking for self-employed• In some countries, barriers exist for unions to recruit self-

employed. Conflict of interest?• Collective bargaining and competition law

ETUC (2018): • Self-employed represented in sectors with traditionally

many self-employed• Some unions specifically for self-employed• More and more bigger unions now focus on recruiting self-

employed as well

14

Policy approaches

• Member states– Criteria to distinguish employment from self-employment– Create a third status

• European Commission: access to adequate social protection for all

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