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The Evolution of U.K. Self‐Employment: A Study of Government Policy and the Role of the Macroeconomy
Author(s) -
Cowling Marc,
Mitchell Peter
Publication year - 1997
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/1467-9957.00073
Subject(s) - economics , unemployment , workforce , labour economics , self employment , wage , differential (mechanical device) , rationing , full employment , stock (firearms) , demographic economics , macroeconomics , entrepreneurship , economic growth , mechanical engineering , health care , finance , aerospace engineering , engineering
This paper reports the findings of a time series analysis exploring the fundamental determinants of the substantial rise in U.K. self‐employment over the period 1972–92. The key findings are that the self‐employed/wage‐employed income differential has a high and positive effect upon the proportion of the workforce in self‐employment, supporting alternative wage theories of labour market status, as does housing wealth, supporting credit‐rationing theories. Perhaps the most interesting feature concerns the relationship between unemployment and self‐employment. On this we find that it is the duration structure of unemployment that matters, not simply the stock of unemployed people. This evidence may imply that self‐employment is a last resort for certain individuals marginalized in the employed sector and facing lengthy spells of unemployment.