Self-employment: the hidden impact of motherhood on work

Having children is causing women to move into self-employment, according to new research.

The research, conducted by Professor Shireen Kanji and Professor Natalia Vershinina and published in Entrepreneurship and Regional Development, shows that this is only true for women, not men.  Both men and women value flexibility in self-employment, but this new research shows women are taking that flexibility so that they can look after their children.

The sequencing of decisions around work and having children need to be examined in detail because family formation unfolds over a period of time, say the researchers. Having a first or second child triggers women to a move to self-employment, but the effect is stronger for a second child. A higher proportion of self-employed women have two children under the age of 18 living in their household (24.7%) than employed women (19.1%), they found.

Self-employment is neglected in labour market studies which tend to focus on women in paid employment. Many women still quit work altogether if they have a child. Many in the UK move to part-time work to manage working and caring, but that often comes with poorer pay and they have less chance of promotion in these jobs. Self-employment could fulfil a similar role to part-time work, but has been neglected in evaluations of how motherhood impacts women’s careers, say the researchers. “Self-employment acts as a kind of buffer between not being in paid work and being in full-time paid work; in the UK it is a sign of the career price women pay for having children,”, says Shireen Kanji. She adds that some of the highest childcare costs in Europe, combined with a shortage of places and lack of Government investment also severely limit work options for UK women.

Most self-employed women in the UK work as sole traders – a person who runs and owns their business as the only worker – or do freelance work. The study shows that getting married makes both men and women significantly more likely to set up their own business. Nevertheless, it is only a minority of self-employed women who set up their own businesses. The researchers say that in more gender equal countries, with greater provision of high-quality childcare, both men and women are more likely to become entrepreneurs, starting high growth businesses which stimulate the economy, accounting for a large part of economic growth. Women-owned businesses contribute to innovation, wealth creation and employment. In the more egalitarian environment of Sweden women are more likely to set up businesses if their partner shares the housework and childcare.

More generally, the research found individuals in couples lead interlinked lives which need to be considered in the context of labour market initiatives. They’re not just individuals out there in the labour market. The researchers say: “Couples’ lives are very much constrained or enabled by what other members of household do. For example, being with a partner on long hours is a tipping point, prompting both men and women to move to self-employment, but women are six times more likely to be in the position of having a partner who works long hours.”

The research analysed a decade of longitudinal UK data from Understanding Society, mapping work patterns among 21 to 55 year old people in different types of employment up until the Covid-19 pandemic.

The researchers says this work shows there’s still a major problem for women in reconciling work and care when they have children. “That is important because understanding how linkages between men and women are shaped by societal and individual expectations deepen what we know both about self-employment, entrepreneurship and gender inequality in the labour market and how these interlink.”

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