Policy Report

The rise in self-employment

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The rise in self-employment

Published January 2012

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By the autumn of 2011, two years after the end of the recession that began in 2008, the number of people in employment in the UK was still almost half a million below the pre-recession peak. However, this Work Audit report reveals that the jobs shortfall would have been much worse without a substantial increase in self-employment, which has risen to a record level of more than 4 million.

Indeed, by the spring of 2010, self-employment was higher than at the start of the recession in 2008 and by the autumn of 2011 had reached a record level of 4.14 million (14.2% of total employment).

In simple accounting terms, the rise in self-employment has offset around 40% of the loss of employee jobs, helping to dampen the rise in unemployment during and since the recession. However, while this outcome is preferable to higher unemployment, a comparison of the make-up of the additional people becoming self-employed in the past three and a half years with self-employed people as a whole suggests that much of the recent rise in self-employment is due to weak demand in the jobs market rather than a sign of resilience or emerging strength in the economy.