The rise in self-employment

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 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.

Download the report below.