European Business Schools Librarian's Group

Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics

Dependent Forms of Self-employment in the UK: Identifying Workers on the Border between Employment and Self-Employment

René Böheim and Ulrike Muehlberger ()
Additional contact information
René Böheim: Department of Economics, Johannes Kepler University Linz, Austria and IZA, Bonn.
Ulrike Muehlberger: Department of Economics, Vienna University of Economics & B.A.

Abstract: We analyse the characteristics of workers who provide work on the basis of a civil or commercial contract, but who are dependent on or integrated into the firm for which they work. We argue that these dependent self-employed lose their rights under labour law, receive less favourable benefits from social security protection and are often beyond trade union representation and collective bargaining. Using data from the British Labour Force Survey we test two hypotheses: (1) Dependent self-employed workers are significantly different from both employees and (independent) self-employed individuals, thus forming a distinct group. (2) Dependent selfemployed workers have lower labour market skills, less labour market attachment and, thus, less autonomy than self-employed workers. The data support our hypothesis that dependent selfemployed workers are a distinct labour market group which differs from both employees and independent self-employed individuals. Men, older workers, those with low education and a low job tenure have greater odds of working in dependent self-employment than their counterparts. Our results suggest that dependent forms of self-employment are used by firms to increase labour flexibility.

JEL-codes: K31; J21; L22 February 2006

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