Trends in self-employment Nick Palmer, Labour Market Statistics ONS Economic Forum 10 July 2014

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Trends in self-employment Nick Palmer, Labour Market Statistics ONS Economic Forum 10 July 2014 1

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Trends in self-employment Nick Palmer, Labour Market Statistics ONS Economic Forum 10 July 2014. Economic Forum 10 July 2014: self-employment. Contents Summary of the recent growth in self-employment – based on headline statistics as published Address some questions and perceptions - PowerPoint PPT Presentation

Transcript of Trends in self-employment Nick Palmer, Labour Market Statistics ONS Economic Forum 10 July 2014

Page 1: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Trends in self-employment

Nick Palmer, Labour Market Statistics

ONS Economic Forum

10 July 2014

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Page 2: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

Contents

1.Summary of the recent growth in self-employment – based on headline statistics as published

2.Address some questions and perceptions - using supplementary data from the Labour Force

Survey

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Page 3: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

Questions related to recent growth in self-employment :

• Post-recession effects or longer-term structural effects ?

• Is it in jobs that drive economic growth ?

• How much of it is part-time/limited hours, (and so low income) ?

• Are people just taking up self-employment in the absence of other opportunities,

• or is this a new generation of young entrepreneurs ?

• To what extent is it more people taking up self-employment and to what extent is it people staying self-employed longer (inflows vs outflows) ?

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Page 4: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

3,200

3,400

3,600

3,800

4,000

4,200

4,400

4,600

24,500

24,700

24,900

25,100

25,300

25,500

25,700

25,900

Feb-

Apr

200

8

Apr

-Jun

200

8

Jun-

Aug

200

8

Aug

-Oct

200

8

Oct

-Dec

200

8

Dec

-Feb

200

9

Feb-

Apr

200

9

Apr

-Jun

200

9

Jun-

Aug

200

9

Aug

-Oct

200

9

Oct

-Dec

200

9

Dec

-Feb

201

0

Feb-

Apr

201

0

Apr

-Jun

201

0

Jun-

Aug

201

0

Aug

-Oct

201

0

Oct

-Dec

201

0

Dec

-Feb

201

1

Feb-

Apr

201

1

Apr

-Jun

201

1

Jun-

Aug

201

1

Aug

-Oct

201

1

Oct

-Dec

201

1

Dec

-Feb

201

2

Feb-

Apr

201

2

Apr

-Jun

201

2

Jun-

Aug

201

2

Aug

-Oct

201

2

Oct

-Dec

201

2

Dec

-Feb

201

3

Feb-

Apr

201

3

Apr

-Jun

201

3

Jun-

Aug

201

3

Aug

-Oct

201

3

Oct

-Dec

201

3

Dec

-Feb

201

4

Feb-

Apr

201

4

Employment: employees compared with self-employed (000s)

Employees Self employed

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Page 5: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

-1,000

-800

-600

-400

-200

0

200

400

600

800

1,000

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

2011

Q2

2011

Q3

2011

Q4

2012

Q1

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

Employees and self-employed: changes since Q1 2008 (thousands)

Self-employed

Employees etc

Total employment

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Page 6: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0 200 400 600 800 1,000

Construction

Professional, scientific & technical activities

Other services

Wholesale, retail & repair of motor vehicles

Administrative & support services

Human health & social work activities

Transport & storage

Agriculture, forestry, fishing, mining, …

Education

Manufacturing

Information & communication

Accommodation and food services

Financial & insurance activities

Real estate activities

Public admin & defence; social security

Self-employed by industry (LFS), thousands

Jan-Mar 2014

Jan-Mar 2013

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Page 7: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

-50 -25 0 25 50 75 100

Construction

Professional, scientific & technical activities

Other services

Agriculture, forestry, fishing, mining, energy & water

Education

Wholesale, retail & repair of motor vehicles

Administrative & support services

Financial & insurance activities

Transport & storage

Real estate activities

Human health & social work activities

Public admin & defence; social security

Manufacturing

Accommodation and food services

Information & communication

Self-employed by industry (LFS), thousands

Change Q1 2013 to Q1 2014

Change Q1 2008 to Q1 2013

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Page 8: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0 200 400 600 800 1,000 1,200

Professionals

Craft and related trades workers

Managers

Service and sales workers

Technicians and associate professionals

Elementary occupations

Plant and machine operators, and assemblers

Skilled agricultural, forestry and fishery workers

Clerical support workers

Self-employed by main occupation group (thousands)

2014Q1

2013Q1

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Page 9: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

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Page 10: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

16-24 25-34 35-49 50-64 65+

Employees and Self-employed: age distributions (%), Jan-Mar 2014

Employees Self-Employed

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Page 11: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

16-24 25-34 35-49 50-64 65+

Self-employed: age distributions (%), Jan-Mar 2008 and Jan-Mar 2014

2008 2014

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Page 12: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

16-24 25-34 35-49 50-64 65+

Employees: age distributions (%), Jan-Mar 2008 and Jan-Mar 2014

2008 2014

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Page 13: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0

5

10

15

20

25

30

Less than 3 months

3 months but less than 6

6 months but less than 12

1 year but less than 2

2 years but less than 5

5 years but less than 10

10 years but less than 20

20 years or more

Employees and Self-employed by length of time with current employer/self-employed, % distribution, Jan-Mar 2014

Employees Self-employed

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Page 14: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0

200

400

600

800

1,000

1,200

Less than 3 months

3 months but less than 6

6 months but less than 12

1 year but less than 2

2 years but less than 5

5 years but less than 10

10 years but less than 20

20 years or more

Self-employed by length of time self-employed, thousands

Jan-Mar 2012 Jan-Mar 2013 Jan-Mar 2014

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Page 15: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0%

10%

20%

30%

40%

50%

60%

Less than 6 Hours 6 up to 15 hours 16 up to 30 hours 31 up to 45 hours Over 45 hours

Usual weekly hours: % distribution, self-employed compared with employees, Jan-Mar 2014

Employees Self-employed

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Page 16: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Jan-Mar 2007 Jan-Mar 2008 Jan-Mar 2009 Jan-Mar 2010 Jan-Mar 2011 Jan-Mar 2012 Jan-Mar 2013 Jan-Mar 2014

Usual weekly hours: self-employed

31 up to 45 hours

Over 45 hours

16 up to 30 hours

6 up to 15 hours

Less than 6 Hours

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Page 17: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2007Q1 2007Q4 2008Q3 2009Q2 2010Q1 2010Q4 2011Q3 2012Q2 2013Q1 2013Q4

Self-employed by whether has employees or not,Q1 2007 to Q1 2014 (thousands)

Total self-employed

Self-employed persons without employees (own-account workers)

Self-employed persons with employees (employers)

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Page 18: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

Summary/Conclusions

Recent strong growth in self-employment:

• reflects a mixture of post-recession effects and longer-term structural changes

•broadly based in terms of industries/occupations and working patterns

•partly reflects ageing workforce generally • and older profile when compared with employees

•mostly among the longer established / little evidence of increase in “stop-gaps”

•dominated by long-term self-employed – implying lower outflows

•“entrepreneurship“/business growth: continues to be just a small factor

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Page 19: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Self-employment income

• Mixed income = National Accounts measure of the income of unincorporated enterprises owned by members of households – part of GDP(I).

• Work by the owner or members of their family cannot be distinguished from the owner's profits as entrepreneur.

• Mixed income for the household sector is calculated as profits + rental income – holding gains.

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Page 20: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Mixed income - compilation

Profits and rental• Rental = income earned through ownership of

buildings • Annual data source is HMRC data based on self-

assessment form – data for 2012/13 will be in BB14• Series extended for later periods using growth in

labour market indicators - LFS self employment, average weekly earnings (AWE)

Holding gains• Gains and losses accrued to owners of assets and

liabilities purely as a result of holding them over time.• Data supplied as part of estimation of gross capital

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Page 21: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Output of the self-employed

• ONS Interdepartmental Business Register (IDBR) used as sampling frame for the Annual Business Survey

• Register includes all UK businesses registered for either value added tax (VAT) or pay as you earn (PAYE)

• But missing units include self-employed, businesses not registered for VAT/PAYE, businesses without employees, etc.

• To overcome this issue, IDBR under-coverage adjustments are made as part of annual Supply and Use balancing process

• An adjustment factor is applied to estimates of market sector output and intermediate consumption at the UK SIC (2007) class level

• Adjustment factors vary by industry; based on periodic analysis using additional data from HMRC – last formally updated for Blue Book 2006

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Page 22: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Experimental estimates of productivity of self-employed

• No direct information is collected on the output of employees or the self-employed

• Income approach is used to apportion output, utilising development work from the sectional unit labour costs system. Income weights are defined as (COE+GOS)/GDP(Y) for employees, and one minus this (= mixed income/GDP(Y)) for the self-employed

• These income weights are consistent with those implied in the national accounts, and are applied to indices of GVA to derive synthetic GVA indices for employees and the self-employed separately

• System utilises new hours estimates developed to meet ESA requirements, with split between employees and the self-employed

• Estimates are non-seasonally adjusted, and presented as four-quarter moving averages, based on 2010=100

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Page 23: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

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Productivity of Employees and Self-Employed4 Quarter Moving Average

Page 24: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

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Productivity of Employees and Self-Employed4 Quarter Moving Average

Page 25: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Economic Forum 10 July 2014: self-employment

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Productivity of Employees and Self-Employed - Construction4 Quarter Moving Average

Page 26: Trends in self-employment Nick Palmer,  Labour  Market Statistics ONS Economic Forum 10 July 2014

Email: [email protected]: @ONS

#ONSeconomy

Website: ons.gov.uk/ons/about-ons/get-involved/events/events/economic-forum/index.html

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