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The distribution and re-distribution of income of selfemployed as freelancers and entrepreneurs in Europe

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  • Merz, Joachim
  • Hirschel, Dierk

Abstract

The economic transformations of modern industrial societies have changed the labor markets in terms of industrial relations and occupational structure. The transformation of the traditional welfare state, the deregulation of the labor markets, the technological change and the reorganization of industrial structures influenced strongly the attitude of individuals towards their preferred labor contract. The structural change of the occupational structure was one of the results of this tendency. In particular the self-employed and freelancers have been affected and are a driving factor of labor market changings. On the one side the value of autonomy regarding industrial relations is becoming more important for employees. On the other side employers want to get rid of social security contributions. As a result the multitudinousness of these professions increased. The increasing varieties of occupations among the self-employed and freelancers influenced strongly their income distribution. Recent studies for Germany have shown a great dispersion and a heterogeneous structure of earnings in particular of freelancers (liberal professions) and self-employed. Though there are a variety of international income distribution studies, but – as to the best to our knowledge – no study focusing on the selfemployed and freelancers within the total labor force. In our study we concentrate on the income distribution of self-employed and freelancers in different European countries. Based on the Luxembourg Income Study (LIS) we analyze five different European countries and the United States structured by different types of welfare states according to Esping Anderson. We analyze income distributional aspects, an occupational decomposition à la Shorrocks, and re-distributional effects of the tax and transfer systems.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 5981.

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Date of creation: May 2003
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Handle: RePEc:pra:mprapa:5981

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Keywords: Europe; Income distribution of freelancers and self-employed; decomposition of inequality; redistribution; LIS microdata;

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  1. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, Elsevier, vol. 2(3), pages 244-263, September.
  2. Shorrocks, Anthony F, 1984. "Inequality Decomposition by Population Subgroups," Econometrica, Econometric Society, Econometric Society, vol. 52(6), pages 1369-85, November.
  3. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, Econometric Society, vol. 48(3), pages 613-25, April.
  4. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, Econometric Society, vol. 44(2), pages 219-31, March.
  5. Gottschalk, Peter & Smeeding, Timothy M., 2000. "Empirical evidence on income inequality in industrialized countries," Handbook of Income Distribution, Elsevier, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 5, pages 261-307 Elsevier.
  6. Sen, Amartya, 1979. " Issues in the Measurement of Poverty," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 81(2), pages 285-307.
  7. Beblo, Miriam & Knaus, Thomas, 2001. "Measuring Income Inequality in Euroland," Review of Income and Wealth, International Association for Research in Income and Wealth, International Association for Research in Income and Wealth, vol. 47(3), pages 301-20, September.
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