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From Covid-19 to collapse? The self-employed and the cost of living crisis

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  • Robert Blackburn
  • Stephen Machin
  • Maria Ventura

Abstract

The sixth LSE-CEP survey of the self-employed was undertaken in November 2022 and found that the downward trend in income levels of the self-employed reported in May 2022 has continued. The cost of living crisis is hitting small businesses particularly hard, with the increase in energy prices and other output costs compounding the effects of the Covid-19 pandemic. Another concern facing the self-employed is their relatively low levels of pension provision - almost three quarters do not make contributions to a personal pension scheme. The self-employed do manage to sustain their activities even in difficult economic conditions but the series of shocks encountered over the past three years is fully testing their resilience. Consequently, we have observed a recent exodus of the self-employed. This analysis suggests that the exodus will continue, even among the most robust enterprises given the scale of challenges.

Suggested Citation

  • Robert Blackburn & Stephen Machin & Maria Ventura, 2023. "From Covid-19 to collapse? The self-employed and the cost of living crisis," CEP Covid-19 Analyses cepcovid-19-029, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepcvd:cepcovid-19-029
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    File URL: https://cep.lse.ac.uk/pubs/download/cepcovid-19-029.pdf
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    References listed on IDEAS

    as
    1. Jack Blundell & Stephen Machin & Maria Ventura, 2020. "Covid-19 and the self-employed: six months into the crisis," CEP Covid-19 Analyses cepcovid-19-012, Centre for Economic Performance, LSE.
    2. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2018. "Global Evidence on Economic Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(4), pages 1645-1692.
    3. Armin Falk & Anke Becker & Thomas Dohmen & David Huffman & Uwe Sunde, 2023. "The Preference Survey Module: A Validated Instrument for Measuring Risk, Time, and Social Preferences," Management Science, INFORMS, vol. 69(4), pages 1935-1950, April.
    4. Jack Blundell & Stephen Machin & Maria Ventura, 2021. "Covid-19 and the self-employed - ten months into the crisis," CEP Covid-19 Analyses cepcovid-19-019, Centre for Economic Performance, LSE.
    5. Robert Blackburn & Stephen Machin & Maria Ventura, 2022. "Covid-19 and the self-employed - A two year update," CEP Covid-19 Analyses cepcovid-19-028, Centre for Economic Performance, LSE.
    6. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David B. Huffman & Uwe Sunde, 2017. "Global Evidence on Economic Preferences," NBER Working Papers 23943, National Bureau of Economic Research, Inc.
    7. Jack Blundell & Stephen Machin, 2020. "Self-employment in the Covid-19 crisis," CEP Covid-19 Analyses cepcovid-19-003, Centre for Economic Performance, LSE.
    8. Robert Blackburn & Stephen Machin & Maria Ventura, 2021. "Covid-19 and the self-employed - 18 months into the crisis," CEP Covid-19 Analyses cepcovid-19-025, Centre for Economic Performance, LSE.
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    Keywords

    Covid-19; self-employed; cost of living crisis; pensions gap;
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