Being your own boss: the many faces of self-employment

The number of individuals registered as self-employed in the UK has grown considerablyover the past decade. The economics literature generally agrees that the self-employedwork longer hours than their counterparts who are in paid employment and earn less.However, most of the literature considers the self-employed as a homogeneous group ofindividuals, whereas in reality, the term now encompasses a variety of very differententrepreneurs, such as businesses or partnerships, sole traders, freelance workers andsub-contractors. Using UK panel data, this paper examines the differences in thecharacteristics of self-employed individuals by self-employment type to highlight thedifference between these groups and their employed counterparts. Random effect probitestimations that model the determinants of being in different self-employment groupshighlight the heterogeneous nature of self-employment and their different determinants.Wage estimations reveal different returns to separate classifications of self-employment.