Dependent self-employed individuals: are they different from paid employees?

Abstract

Purpose: This study focusses on dependent self-employment, which covers a situation where a person works for the same employer as a typical worker whilst on a self-employment contractual basis, i.e. without a traditional employment contract and without certain rights granted to "regular" employees. Design/methodology/approach: The research exploits the individual-level dataset of 35 European countries extracted from the 2017 edition of the European Labour Force Survey (EU LFS) and compares the characteristics of employees and dependent self-employed individuals. Methodologically, the study relies on the estimation of a multivariate logistic regression model. Findings: The main hypothesis assuming that dependent self-employed work most often in low-skilled occupations was empirically supported. There was also a non-linear (u-shaped) relationship between the years of accumulated experience (with a turning point at 35 years) and the likelihood of being dependent self-employed. Other results showed that dependent self-employed are less likely to be women and the dependent self-employed are more likely born outside of the countries where the dependent self-employed participate in the labour markets. Originality/value: The study contributes to the field by adopting a comparable definition of dependent self-employment and exploiting the recent theoretical support of The Work Precarity Framework. The phenomenon should still be addressed by policymakers and labour office representatives, aiming to protect, primarily, vulnerable lower-skilled workers. The ongoing research should study the longitudinal dimension of dependent self-employment with a focus on motivational aspects.