IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp11007.html
   My bibliography  Save this paper

Poverty and Material Deprivation among the Self-Employed in Europe: An Exploration of a Relatively Uncharted Landscape

Author

Listed:
  • Horemans, Jeroen

    () (University of Antwerp)

  • Marx, Ive

    () (University of Antwerp)

Abstract

In work-poverty has become a pressing social issue in Europe. The self-employed remain relatively uncharted terrain in this context. With about 15 percent of European workers in self-employment this group can no longer be ignored, especially since self-employment is on the rise in many countries, particularly own-account self-employment. Drawing on EU-SILC data this paper provides a systematic mapping exercise of poverty and living standards among the self-employed in the European Union. We find that the self-employed in Europe generally face significantly higher income poverty risks than contracted workers. Looking in more detail at the drivers of income poverty among the self-employed we find that in addition to lower reported earnings, lower overall work-intensity at the household level appears to be an important driver. However, while income poverty levels are quite significant among the self-employed, material deprivation rates are generally much lower. The discrepancy between income poverty measures and material deprivation measures is much larger for the self-employed than it is for employees. One possible explanation is that the self-employed can more often draw on assets accumulated over the life cycle or on business assets they control. The self-employed constitute a very mixed segment of the workforce and within-group inequality is quite significant. One group emerges as being particularly at-risk of poverty are own-account workers, substantiating worries about the rise of this form of self-employment. While the paper offers extensive descriptive analysis and some tentative explanations, an important and sizable research agenda remains.

Suggested Citation

  • Horemans, Jeroen & Marx, Ive, 2017. "Poverty and Material Deprivation among the Self-Employed in Europe: An Exploration of a Relatively Uncharted Landscape," IZA Discussion Papers 11007, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11007
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp11007.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jeroen Horemans & Ive Marx & Brian Nolan, 2016. "Hanging in, but only just: part-time employment and in-work poverty throughout the crisis," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-19, December.
    2. Henning Lohmann, 2008. "Welfare States, Labour Market Institutions and the Working Poor: A Comparative Analysis of 20 European Countries," Discussion Papers of DIW Berlin 776, DIW Berlin, German Institute for Economic Research.
    3. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
    4. Åstebro, Thomas & Chen, Jing, 2014. "The entrepreneurial earnings puzzle: Mismeasurement or real?," Journal of Business Venturing, Elsevier, vol. 29(1), pages 88-105.
    5. Brian Nolan & Christopher T. Whelan, 2010. "Using non-monetary deprivation indicators to analyze poverty and social exclusion: Lessons from Europe?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 305-325.
    6. Yannis Georgellis & Howard Wall, 2005. "Gender differences in self-employment," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(3), pages 321-342.
    7. Gema Álvarez & Ana I. Sinde-Cantorna, 2014. "Self-employment and job satisfaction: an empirical analysis," International Journal of Manpower, Emerald Group Publishing, vol. 35(5), pages 688-702, July.
    8. Jeroen Horemans & Ive Marx, 2013. "In-work poverty in times of crisis: do part-timers fare worse?," ImPRovE Working Papers 13/14, Herman Deleeck Centre for Social Policy, University of Antwerp.
    9. Jeroen Horemans, 2017. "Atypical Employment and In-Work Poverty: A Different Story for Part-Timers and Temporary Workers?," Working Papers 1701, Herman Deleeck Centre for Social Policy, University of Antwerp.
    10. Bruton, Garry D. & Ketchen, David J. & Ireland, R. Duane, 2013. "Entrepreneurship as a solution to poverty," Journal of Business Venturing, Elsevier, vol. 28(6), pages 683-689.
    11. Román, Concepción & Congregado, Emilio & Millán, José María, 2013. "Start-up incentives: Entrepreneurship policy or active labour market programme?," Journal of Business Venturing, Elsevier, vol. 28(1), pages 151-175.
    12. Dawson, Christopher & Henley, Andrew & Latreille, Paul L., 2009. "Why Do Individuals Choose Self-Employment?," IZA Discussion Papers 3974, Institute of Labor Economics (IZA).
    13. Baumann, Florian & Brändle, Tobias, 2012. "Self-employment, educational attainment and employment protection legislation," Labour Economics, Elsevier, vol. 19(6), pages 846-859.
    14. F. van Es & D. J. van Vuuren, 2011. "A decomposition of the growth in self-employment," Applied Economics Letters, Taylor & Francis Journals, vol. 18(17), pages 1665-1669.
    15. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    16. Levesque, Moren & Minniti, Maria, 2006. "The effect of aging on entrepreneurial behavior," Journal of Business Venturing, Elsevier, vol. 21(2), pages 177-194, March.
    17. Torrini, Roberto, 2005. "Cross-country differences in self-employment rates: the role of institutions," Labour Economics, Elsevier, vol. 12(5), pages 661-683, October.
    18. Nolan, Brian & Whelan, Christopher T., 2011. "Poverty and Deprivation in Europe," OUP Catalogue, Oxford University Press, number 9780199588435.
    19. Bruce Bradbury, 1997. "The Living Standards of the Low Income Self‐Employed," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(4), pages 374-389, December.
    20. Andersson Joona, Pernilla & Wadensjö, Eskil, 2004. "Self-Employed Immigrants in Denmark and Sweden: A Way to Economic Self-Reliance?," IZA Discussion Papers 1130, Institute of Labor Economics (IZA).
    21. David Brady & Jennifer Moren Cross & Andrew Fullerton, 2010. "More than Just Nickels and Dimes: A Cross-National Analysis of Working Poverty in Affluent Democracies," LIS Working papers 545, LIS Cross-National Data Center in Luxembourg.
    22. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
    23. Kautonen, Teemu & Kibler, Ewald & Minniti, Maria, 2017. "Late-career entrepreneurship, income and quality of life," Journal of Business Venturing, Elsevier, vol. 32(3), pages 318-333.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    in-work poverty; material deprivation; self-employment; Europe;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp11007. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Holger Hinte). General contact details of provider: http://www.iza.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.