A new report from the Institute for Fiscal Studies shows that the big rise in solo self employment over the last two decades is in large part linked to a lack of employment opportunities and that the gap between freelances and employees is getting wider.
The rise in freelancers in the last few years is in part explained by a lack of opportunities in traditional employment, according to a new study by the Institute for Fiscal Studies.
It charts the dramatic rise in self-employment in recent years, entirely driven by solo traders and owner-managers with no employers. This is up from 2.3 million in 2000 to nearly 4 million by late 2019. It finds that this group is increasingly disadvantaged.
The report finds:
Xiaowei Xu, a Senior Research Economist at IFS and an author of the report, said: “Taken together, the evidence in our report suggests that solo self-employment is often a fall-back option for workers who face bleak prospects in traditional employment. Covid-19 has now made these prospects even worse. It is important to try to find ways of supporting people which recognises that some self-employment is really akin to hidden unemployment, rather than people pursuing appealing business opportunities.”
There has been much concern in the last months about the financial support available to the self employed compared to the employed, with many thousands of self employed people missing out on any help and others, such as women who have taken maternity leave in the last four years, facing reduced payments. A report from IPSE and Starling Bank shows that women freelancers have been the most impacted by the pandemic.