Here to Stay: Women’s self-employment in a (post) austerity era

Background

The rise in self-employment is one of the defining trends in the UK labour market since the financial crisis and economic recession. Self-employment in the UK is at the highest point since records began 40 years ago^[1], with the number of self-employed increasing by 650,000 since 2008 to reach 4.5 million.

Self-employed women are the majority of the newly self-employed. The increase in the number of women in the UK becoming self-employed is unprecedented. Historically, women have made up just over a quarter of the self-employed, but since the 2008 downturn 58% of the newly self-employed have been female. The rise in female self-employment is likely to be more than a recessionary ‘blip’.

In this report, the Women’s Budget Group considers key trends and challenges associated with the rise in female self-employment and sets out a series of policy recommendations to address these.

Key Findings

• While for many women self-employment is a positive option allowing them to pursue fulfilling and flexible work, for a growing proportion self-employment does not appear to be a “choice” but a necessity driven by factors such as public sector job losses, the uprating of the female retirement age, or a need to accommodate caring responsibilities.
• The self-employed are working longer hours and earning less. Despite the rise in the number of self-employed, between 2009 to 2013 their income as a group declined by around £8 billion (from £88.4 to £80.6 billion).^[2]
• The gender pay gap for the self-employed stands at 41% and, as such, self-employment may be a route into low pay for some women
• Productivity of the self-employed has declined by 32% since 2008
• Low earnings and productivity have implications for the economy as a whole, with the State foregoing considerable tax revenue as a result of declining earning.
• Gender-blind policy setting has led to an enterprise support infrastructure and incentives that are primarily taken up by men.

Recommendations

• A woman-friendly enterprise support infrastructure
• Equalised parental benefits for the self-employed
• Strengthened provisions for flexible working to provide more opportunities for those women who would like to remain employees and combine this with caring responsibilities
• Review of Universal Credit to eliminate barriers to self-employment, including the capital limit which is likely to undermine the asset base of some newly self-employed
• Gender disaggregated information on uptake of business support measures to enable effectiveness to be assessed
• Inclusion of the self-employed in official earnings data through an ‘All worker’ category

Read the report