Data extracted in November 2018.
No planned update of the article.
This article presents the main results from the 2017 Labour Force Survey (LFS) ad-hoc module on "Self-employment". The goal of this ad-hoc module is to provide important information on the self-employed in addition to the information coming from the core LFS. More specifically, this ad-hoc module aims to identify and categorise persons at the boundary between employment and self-employment and to define the "economically dependent self-employed" according to economic and organisational dependency. In addition, this module compares self-employed and other employed persons (employees and family workers).
This article is divided into three parts: the first part explains the definition of the economically dependent self-employed and proposes ideas for improving this definition of this dependency. The second part of this article is dedicated to the working conditions of the self-employed, while the last part compares the job satisfaction of the self-employed, employees and family workers.
Almost two thirds of the self-employed had more than 9 clients
The 2017 Labour Force Survey (LFS) ad-hoc module targets the self-employed and the persons at the boundary between employment and self-employment. It aims moreover to measure the degree of economic and organisational dependency of the self-employed, defined on the basis of the number of clients and the percentage of income coming from a client as well as in terms of control over working hours.
Figure 1 shows the number and importance of clients in the last 12 months. This variable is one of the three variables  chosen in the context of the 2017 module to define the economically dependent self-employed. One aspect of dependency can indeed be linked to having only one client or having a dominant one (in terms of income) among several clients. In 2017, 18.2 %  of the self-employed in the EU-28 reported having just one client or a dominant client. Differences can be observed among the EU Member States: the highest percentage of self-employed persons having just one client or a dominant client was observed in Hungary (32.9 %) and Slovakia (31.9 %), while the lowest rate was recorded in Croatia (9.2 %).
On the other hand, more than 3 in 5 self-employed persons (61.2 %) in the EU reported having more than 9 clients in the last 12 months. Here also, variations exist across EU Member States. The rate of self-employed persons having more than 9 clients ranged from 44.3 % in Latvia and 48.6 % in Slovakia to 74.1 % in Belgium and 75.9 % in Spain.
The second variable chosen to define the economically dependent self-employed is the client's influence over working time (start and end of the working day) which relates to organisational dependency. Self-employed persons can be considered at risk of dependency if their client decides their working time. As shown in Figure 2, more than 4 in 5 (84.2 %) self-employed persons having at least one client decided on their own working time in 2017. In each EU Member State, the majority of the self-employed were independent in terms of work organisation. The largest rate of self-employed persons having control of their working time was recorded in Latvia (94.2 %), followed by Estonia (93.3 %), Hungary (91.2 %) and Poland (91.0 %) while the smallest rates were found in Slovakia (66.2 %) and the Netherlands (64.5 %). In the Netherlands, 31.3 % of the respondents declared that the client had control over their working time.
Only 3 % of the self-employed dependent on a dominant client
According to the operational definition adopted by Eurostat in the context of the 2017 module, the economically dependent self-employed were defined as the self-employed without employees who worked during the last 12 months for only one client or for a dominant client, and this client decided about their working hours.
Infographic 1 presents the repartition of self-employed persons according to the three main criteria used to define the dependency:
- Presence of employees or not
- Economic dependency (Number and importance of clients in the last 12 months)
- Organisational dependency (Influence over deciding working hours)
In the EU-28, among the 33 million self-employed persons, 71.8 % were self-employed without employees in 2017 (see Infographic 1); 20.2 % of the self-employed without employees (24 million persons) had one client or a dominant client in the last 12 months. Within this last group (5 million self-employed without employees having a dominant client), 23.4 % declared that the client(s) had control over working time. Consequently, the number of economically dependent self-employed persons, as defined for this module, was about 1 million persons in the EU-28 in 2017. This represents 3.4 % of the self-employed population.
Looking at the 9 million self-employed with employees, 10 % (i.e. 0.9 million persons) had only one client or a dominant one. Moreover, 0.1 million persons were self-employed with employees having a dominant client deciding on their working time. This group can be considered for a possible extension of the current definition of the economically dependent self-employed.
Figure 3 shows that the percentage of the dependent self-employed without employees is very low. However, differences between countries can be found. The largest rate of dependent self-employed persons without employees was observed in Slovakia (12.8 %), followed by Cyprus (8.9 %). Conversely, the rate of dependent self-employed persons without employees recorded by Greece, Bulgaria, Estonia, Croatia, Latvia, Lithuania, Luxembourg and Malta was close to zero.
The percentage of self-employed persons with an unknown dependency was largest in Portugal (31.7 %) and Luxembourg (26.1 %). This corresponds to self-employed persons without employees who did not answer the questions on the number of clients and on the client's influence over working time.
The definition of the economically dependent self-employed chosen in the context of the 2017 module should nevertheless be considered as a first approach to the concept. Discussions are currently ongoing at international level (with the International Labour Organisation) on the definition to adopt. Two other variables of the 2017 module, on job autonomy and business partners, can be part of the discussions for the revision of the current definition.
Job autonomy refers to the ability to influence the content and order of tasks. Not having any influence on the content of tasks can be a sign of dependency. The percentage of self-employed persons who reported not being able to influence the content of tasks was 14.7 % in the EU-28 in 2017 (see Figure 4). This rate was higher than 20 % in seven Member States, with the highest rate recorded in Cyprus, where more than half (56.7 %) of the self-employed were not able to influence the content of their tasks. The lowest rates were found in Denmark (3.4 %), Hungary (3.4 %), and Portugal (4.3 %).
However, in all countries the majority of the self-employed declared being able to influence both the content and the order of the tasks. At EU level, the rate of self-employed persons who reported being able to influence both the content and order of tasks was 81.4 %.
Job autonomy is highly correlated with the number and importance of clients (see Figure 5). The percentage of self-employed being able to influence both the content and order of tasks equals 84.9 % among those having more than 9 clients, while it only reaches 71.0 % for those with one client or one dominant client. The rate for the self-employed having between 2 and 9 clients lies in the middle, at 81.3 %.
Looking at the distribution by countries, Hungary is the only country where the percentage of self-employed persons able to influence both the content and order of tasks stayed the same (90 %), regardless of the number and importance of clients. The largest gap between self-employed persons able to influence both the content and order of tasks with one (dominant) client and those with more than 9 clients was observed in Slovakia (gap of 38.6 percentage points). This gap was smallest in Bulgaria, while Malta and Lithuania were the only countries where self-employed persons with one (dominant) client declared being more autonomous than self-employed persons with more than 9 clients (gap of -3.1 p.p. in Malta and -0.7 p.p. in Lithuania).
Having formal or informal business partners can also be considered in the analysis of dependency. The 2017 module collected data on whether the self-employed work with a co-owner and/or in a network of other self-employed persons. Figure 6 shows that 3 in 5 self-employed persons (60.9 %) were working alone, without a co-owner or outside a network, in 2017. Among the EU Member States, Romania (90.3 %) recorded the highest rate of self-employed persons working alone, followed by Greece (83.7 %), Cyprus (77.6 %) and Malta (75.6 %). Conversely, Finland (19.1 %) has by far the lowest rate of self-employed persons working alone.
17% of the economically dependent self-employed in the construction sector
Using the definition of the economically dependent self-employed chosen in the context of the 2017 module, this section compares the economically dependent and independent self-employed without employees as regards their economic activity, occupation and educational attainment level.
Figure 7 presents the distribution of self-employed persons without employees by economic activity in the EU-28 in 2017, for those being economically dependent and, separately, for those being economically independent. Independent self-employed persons mainly worked in the agriculture, forestry and fishing sector and in the wholesale and retail trade sector (19.2 % and 13.9 % of the independent self-employed, respectively). On the other hand, the dependent self-employed were mainly present in the construction sector and in the human health and social work activities (16.8 % and 11.1 % of the dependent self-employed, respectively). Professional, scientific and technical activities contain a high share of both dependent and independent self-employed persons: indeed 9.8 % and 13.0 % of the dependent and independent self-employed, respectively, worked in this economic sector. At the other end, the dependent self-employed are rare in the following four sectors: accommodation and food services, financial and insurance activities, real estate activities and activities of households as employers.
Figure 8 analyses the occupation of the dependent versus the independent self-employed without employees. For both groups, the most frequent occupation is being a professional (29.0 % of the dependent self-employed and 22.1 % of the independent ones). Skilled agricultural, forestry and fishery workers are well represented among the independent self-employed without employees (18.7 %) while nearly no dependent self-employed reported having this occupation. Also, very few managers and clerical support workers were classified as dependent self-employed. On the other hand, the following occupations were often reported by the dependent self-employed: craft and related trades workers (14.9 %), technicians and associate professionals (14.2 %), service and sales workers (13.8 %), elementary occupations (9.6 %) and plant and machine operators and assemblers (9.1 %).
Figure 9 compares the dependent and independent self-employed without employees by educational attainment level. At EU level, dependent self-employed persons tend to have a higher educational level than the independent self-employed without employees: there is a larger share of dependent self-employed persons than independent ones, with a medium (45.7 % vs 44.4 %) or high (37.1 % vs 32.8 %) level of education.
1 in 2 self-employed persons highly satisfied with their current job
Self-employed persons in the EU-28 reported several reasons for running their own business: suitable opportunity (22.7 %), continuation of the family business (15.8 %), usual practice in the field (14.8 %), flexible work hours (11.2 %), no job found as employee (10.8 %) and request by former employer (1.9 %). In fifteen EU Member States, “suitable opportunity” was the most frequently mentioned reason for becoming self-employed (see Figure 10). The largest share of self-employed reporting this reason was observed in Bulgaria (42.1 %), followed by Italy (39.0 %), Hungary (35.9 %) and Malta (33.3 %). Poland is the country where the share of self-employed persons mentioning that they continued the family business is the highest (26.6 %), followed by Slovenia (25.5 %), Austria and Greece (both 25.3 %). No job found as an employee is also a significant reason: 38.3 % of the self-employed gave that reason in Romania, 25.3 % in Cyprus and 22.7 % in Croatia. A high share of self-employed also started their own business because it was the usual practice in the field: this share reached 28.2 % in Czechia, 27.6 % in Belgium and 25.8 % in Slovakia.
As regards the difficulties faced in the last 12 months, 28.3 % of the self-employed reported having no difficulties being self-employed (see Figure 11). In 24 EU Member States, the answer "no difficulty" was most frequently mentioned when self-employed, with the largest share in Czechia (44.2 %), the Netherlands (42.1 %), the United Kingdom (40.8 %), Sweden (39.9 %) and Germany (39.5 %). Conversely, the smallest rates were seen in Greece (7.7 %) and Italy (10.1 %); Turkey (11.0 %) also recorded a low rate.
Regarding people having difficulties, the main difficulties reported at EU level were a high administrative burden (13.1 %), periods of having no customers, no assignments or projects to work on (12.3 %), delayed payments or non-payments (11.7%) and periods of financial hardship (8.8 %) (see Figure 12). In 13 EU Member States, a high administrative burden was reported as a major difficulty (most frequent reply after no difficulties). The highest proportion of self-employed persons facing a high administrative burden was found in Belgium (27.6 %), followed by Italy (25.8 %), Slovakia (23.2 %), Czechia (21.9 %) and Hungary (20.3 %). In Estonia, 30.4 % of the self-employed had periods of financial hardship. In Lithuania (22.8 %), Cyprus (22.6 %), Latvia (22.1 %), Italy (21.6 %), Bulgaria (21.1 %) and Portugal (21.1 %) more than one fifth of the self-employed reported periods of having no customers, no assignments or projects to work on. In contrast, Germany recorded the lowest proportion of persons reporting one of these difficulties (less than 9 % of self-employed persons reported each difficulty previously mentioned).
Infographic 2 presents the willingness to change the current professional status: do employees wish to be self-employed? Or, alternatively, would the self-employed prefer to be employees? The vast majority of employed persons reported that they do not want to change professional status (84.7 % at EU level). Among the self-employed, 15.7 % wished to work as an employee (i.e. 5 million persons). Employees and family workers wishing to be self-employed were less significant in terms of proportion (9.1 %), but not in terms of absolute numbers (17 million persons).
A focus on the self-employed shows that the economically dependent self-employed most particularly wish to work as employees (32.6 %). The corresponding percentage for the independent self-employed without employees is 17.4 % and for the self-employed with employees 10.5 %. These results show that a strong relation exists between self-employed status and the willingness to change.
Figure 13 compares job satisfaction between the different professional status. Self-employed persons are generally more satisfied than both employees and contributing family workers (see Figure 13). The majority of the self-employed with employees (53.3 % at EU level) declared being highly satisfied with their current job. This was followed by the independent self-employed without employees (46.1 %) and then the employees (42.1 %). Contributing family workers recorded the lowest share of persons being highly satisfied with their job (30.0 %).
Job satisfaction nevertheless varies considerably among countries (see Figure 14). In Denmark, Malta and Sweden, employed persons were the most satisfied. In 16 EU Member States, self-employed persons are more satisfied than employees and family workers. However, in Belgium (60.0 %), Czechia (66.04 %) and Sweden (86.2 %) the contributing family workers status reported the highest satisfaction rates. In nine EU Member States, employees were more satisfied than the self-employed and family workers. Among the 28 EU Member States, the lowest satisfaction rates were observed in Romania, with only 18.9 % of self-employed persons and 14.6 % of family workers being highly satisfied. In Turkey, the rates were even lower: only 10.8 % of family workers and 12.7 % of self-employed persons reported being highly satisfied with their current job.
Source data for tables and graphs
The data source for this article is the European Labour Force Survey ad hoc module 2017, covering all Member States, as well as Iceland, Norway, Switzerland and Turkey.
- Self-employed persons with employees are defined as persons who work in their own business, professional practice or farm for the purpose of earning a profit, and who employ at least one other person.
- Self-employed persons without employees are defined as persons who work in their own business, professional practice or farm for the purpose of earning a profit, and who do not employ any other person.
- Employees are defined as persons who work for a public or private employer and who receive compensation in the form of wages, salaries, fees, gratuities, payment by results or payment in kind; non-conscripted members of the armed forces are also included.
- Family workers are persons who help another member of the family to run an agricultural holding or other business, provided they are not considered as employees.
Employment statistics can be used for a number of different analyses, including macroeconomic (looking at labour as a production factor), productivity or competitiveness studies. They can also be used to study a range of social and behavioural aspects related to an individual’s employment situation, such as the social integration of minorities, or employment as a source of household income.
Employment statistics are at the heart of many EU policies. The European employment strategy (EES) was launched at the Luxembourg jobs summit in November 1997 and was revamped in 2005 to align the EU’s employment strategy more closely to a set of revised Lisbon objectives, and in July 2008, employment policy guidelines for the period 2008–2010 were updated. In March 2010, the European Commission launched the Europe 2020 strategy for smart, sustainable and inclusive growth; this was formally adopted by the European Council in June 2010. The European Council agreed on five headline targets, the first being to raise the employment rate for women and men aged 20 to 64 years old to 75 % by 2020. EU Member States may set their own national targets in the light of these headline targets and draw up national reform programmes that include the actions they aim to undertake in order to implement the strategy. The implementation of the strategy might be achieved, at least in part, through the promotion of flexible working conditions — for example, part-time work or work from home — which are thought to stimulate labour participation. Among others, initiatives that may encourage more people to enter the labour market include improvements in the availability of childcare facilities, providing more opportunities for lifelong learning, or facilitating job mobility. Central to this theme is the issue of ‘flexicurity’: policies that simultaneously address the flexibility of labour markets, work organisation and labour relations, while taking into account the reconciliation of work and private life, employment security and social protection. In line with the Europe 2020 strategy, the EES encourages measures to help meet three headline targets by 2020, namely, for:
- 75 % of people aged 20 to 64 to be in work;
- rates of early school leaving to reduce below 10 %, and for at least 40 % of 30 to 34-year-olds to have completed a tertiary education;
- at least 20 million fewer people to be in or at-risk-of-poverty and social exclusion.
Employment and social policies are also the main fields of interest of the European Pillar of Social Rights, which is about delivering new and more effective rights for citizens. It has 3 main categories: (1) Equal opportunities and access to the labour market, (2) Fair working conditions and (3) Social protection and inclusion. In particular, today's more flexible working arrangements provide new job opportunities especially for the young but can potentially give rise to new precariousness and inequalities. The Commission wants to explore ways of providing as many people as possible with social security cover, including self-employed and gig-economy workers. In practice, these people should also be able to build up rights against contributions.
Consequently, in order to monitor progress towards the objectives set out in the Europe 2020 Strategy and the European Pillar of Social Rights, it is namely necessary to have a comprehensive set of data on self-employment which allows comparisons between EU Member States. More specifically, the 2017 Labour Force Survey (LFS) ad-hoc module answers the data needs linked to the 'Small Business Act’  and the 2012 Commission Communication 'Towards a job-rich recovery’  as part of the Employment Package, which encourages job creation specifically through promoting and supporting self-employment.
The target population of this ad-hoc module is persons in employment, that is, both employees and self-employed, but it aims to investigate on the economically dependent self-employed, which are defined as self-employed without employees AND who have either only one or one main client AND whose (one or main) client decides the working hours. This is a much debated group over the last decade, but there is a pronounced lack of internationally comparable quantitative data on them, and this ad-hoc module is the first large scale attempt to find and classify them.
- LFS main indicators (t_lfsi)
- Population, activity and inactivity - LFS adjusted series (t_lfsi_act)
- Employment - LFS adjusted series (t_lfsi_emp)
- Unemployment - LFS adjusted series (t_une)
- LFS series - Detailed annual survey results (t_lfsa)
- LFS series - Specific topics (t_lfst)
- LFS ad-hoc modules (lfso)
- The three variables are presence of employees or not, number and importance of clients in the last 12 months and influence over deciding working hours.
- Please note that percentage calculations in this article exclude item non-response.
- Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — ‘Think Small First’- A ‘Small Business Act’ for Europe, adopted on 25.6.2008 — COM(2008) 394 final.
- Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — ‘Towards a job-rich recovery’, adopted on 18.4.2012 — COM(2012) 173.