Self-Employed (level)
Total number of self-employed persons
Historical Data
What Is the Self-Employment Rate?
The self-employment rate measures the proportion of total employment accounted for by individuals who work for themselves rather than for an employer. Self-employed workers include a diverse range of people—from independent professionals and small-business owners to freelancers, gig-economy participants, and subsistence farmers—united by the fact that they derive their income from their own enterprise rather than from a wage or salary paid by another entity.
This indicator provides insight into the structure and dynamism of the labour market. A high self-employment rate can signal a vibrant entrepreneurial culture in which individuals are willing and able to start their own ventures. Alternatively, it can indicate a lack of formal employment opportunities, pushing workers into self-employment as a survival strategy. The interpretation depends heavily on context: the self-employment rate in a high-income innovation hub means something very different from the same rate in a developing economy with a large informal sector.
Self-employment data are typically drawn from the household labour force survey, which asks respondents about their employment status during the reference week. Individuals who report working in their own business, farm, or professional practice—whether incorporated or unincorporated—are classified as self-employed. Some statistical agencies further distinguish between self-employed persons with employees (employers) and those without (own-account workers), a decomposition that provides additional insight into the nature of self-employment.
The self-employment rate has attracted renewed attention in recent years due to the rise of the gig economy and platform work. Workers who provide services through digital platforms—ride-hailing, food delivery, freelance consulting—are often classified as self-employed, even though they may have little of the autonomy or entrepreneurial independence traditionally associated with self-employment. This blurring of categories has prompted debates about measurement, labour-market regulation, and the adequacy of social protection for non-standard workers.
How It Is Calculated
The self-employment rate is calculated as the number of self-employed persons divided by total employment, expressed as a percentage.
where is the number of self-employed persons and is total employment (the sum of employees and self-employed persons).
The decomposition into employers and own-account workers is expressed as:
The share of employers within self-employment is sometimes used as a rough indicator of the "quality" of self-employment, since employers have created positions for others and are more likely to be running substantive businesses. Own-account workers, by contrast, may include both highly successful independent professionals and individuals eking out a living through informal or precarious work.
Some analysts also calculate the contribution of self-employment to employment growth, which reveals whether net job creation is being driven by the expansion of self-employment or by growth in paid employment:
When this share is unusually high, it may suggest that the formal economy is not generating enough paid positions to absorb labour-force growth, and workers are turning to self-employment as an alternative.
How to Read the Numbers
Self-employment rates in advanced economies typically range from about 7 to 15 percent of total employment, though some countries—particularly those in Southern Europe and parts of Asia—have rates above 20 percent. In developing economies, where formal-sector employment is scarce, self-employment can account for the majority of total employment.
Trends in the self-employment rate are more informative than the level at any single point in time. A rising self-employment rate during an economic expansion may reflect growing entrepreneurial dynamism and a healthy appetite for risk-taking. The same rise during a recession may signal involuntary self-employment—workers who have been laid off and are cobbling together an income through freelancing, consulting, or informal work because paid positions are unavailable.
The composition of self-employment matters enormously. An increase driven by the growth of incorporated self-employment—individuals who have formed companies—is generally viewed as a positive sign, since incorporation is associated with greater business formality, investment, and job creation. An increase driven by unincorporated own-account work, particularly in low-wage services, paints a less encouraging picture and may indicate deteriorating job quality.
Cross-country comparisons must account for institutional differences. Countries with generous unemployment insurance may have lower self-employment rates because workers can afford to wait for suitable paid positions rather than starting ventures out of necessity. Countries with lighter regulatory burdens on small businesses and stronger entrepreneurial cultures may have higher self-employment rates that reflect genuine opportunity rather than desperation.
Economic Significance
The self-employment rate reveals important features of the economy that are invisible in headline employment statistics. It speaks to the balance between entrepreneurship and dependent employment, the flexibility of labour markets, the availability of formal jobs, and the quality of work. Each of these dimensions has implications for economic growth, productivity, inequality, and social protection.
From a growth perspective, self-employment is a mixed blessing. On one hand, self-employed entrepreneurs are the source of new business creation, innovation, and competitive dynamism. They identify unmet needs, take risks, and create the firms that may become tomorrow's large employers. On the other hand, much self-employment is small-scale and low-productivity, particularly in sectors such as retail, personal services, and agriculture. A high self-employment rate can therefore coexist with—or even contribute to—weak aggregate productivity growth if the self-employed are disproportionately concentrated in low-value activities.
The implications for inequality are similarly nuanced. Self-employment income is more unequally distributed than wage income, because the self-employed population spans the full spectrum from successful professionals and business owners to marginal workers with unstable earnings. A rising self-employment rate can therefore widen income inequality, particularly if the growth is concentrated at the bottom of the earnings distribution.
Labour-market policy must grapple with the distinctive vulnerabilities of the self-employed. In most countries, self-employed workers have weaker access to unemployment insurance, sick pay, parental leave, and pension benefits than their salaried counterparts. As self-employment grows—particularly in its more precarious forms—these gaps in social protection become a pressing policy concern. Governments are experimenting with a range of approaches, from extending benefit eligibility to self-employed workers to creating new categories of worker status that sit between traditional employment and full self-employment.
Central banks and fiscal authorities monitor the self-employment rate as part of their broader assessment of labour-market health. A surge in self-employment during a downturn may mask the true extent of labour-market weakness, because some of the individuals counted as self-employed are effectively underemployed or would prefer paid positions. This matters for policy calibration: if the self-employed are less securely attached to the labour market than employees, the measured employment rate may overstate the economy's true level of labour utilisation.
For business dynamism, the self-employment rate provides a partial proxy for the rate at which new enterprises are being formed. While not all self-employed persons are entrepreneurs in the Schumpeterian sense—creating new products or processes that disrupt existing markets—the self-employment rate does capture the broader base from which high-growth startups emerge. Countries seeking to foster innovation and entrepreneurship often track self-employment alongside more direct measures of business entry, survival, and growth.
Related Indicators
Why it matters
Captures gig economy trends and entrepreneurship.