The Malta Independent 18 August 2019, Sunday

Self-employment - 2017: The National Statistics Office has just published Self-Employment 2017

The Malta Business Weekly Thursday, 17 January 2019, 16:23 Last update: about 8 months ago

The data provided in this publication is extracted from a Labour Force Survey ad hoc module carried out during 2017. The LFS is a household based survey and is used as a monitoring tool across the European Union for assessing progress made in various spheres of labour market and social statistics.

The EU-LFS regulation (EC) No 577/981 together with Commission Implementing Regulation EU 2016/82 was the legal framework on which the collection of data on self-employment took place.

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This publication presents a snapshot of self-employed persons and identifies their economic situation including the type of employment, working hours, occupation and economic activity. Information regarding job satisfaction and autonomy at the place of work for both employees and self-employed persons is also provided. The target group for this ad hoc module was employed persons aged 15 and over.

Key facts:

  • In 2017, self-employed persons were estimated at 33,648 of which 22,814 did not have any employees.
  • On average, full-time self-employed worked 46.4 hours per week while part-timers worked 24.4 hours per week.
  • The majority of self-employed worked mostly as service and sales workers (26.7 per cent), craft and related trade workers (22.5 per cent) and managers (14.6 per cent).
  • Nearly 80 per cent of all self-employed persons had more than 9 clients in the preceding 12 months and the majority had no dominant clients.
  • Most of the self-employed opted to have this type of professional status after a suitable work opportunity presented itself (11,209 persons). A further 6,632 persons stated it was the usual practice in their field of work to become self-employed, whereas 6,566 persons continued their family business.
  • In most cases, own account workers chose not to have employees due to the market conditions including insufficient amount of work (44.1 per cent).
  • One in every four self-employed persons worked with a co-owner and/or in a network with other self-employed (24.5 per cent).
  • In 2017, nearly 23 per cent of the self-employed were considering hiring more workers on a permanent or temporary basis or making use of subcontractors.
  • In general, self-employed persons had influence over both the content and the order of their daily tasks (85.0 per cent).
  • Overall, both employees and self-employed were not willing to change their current professional status (86.3 per cent).
  • Almost a third of the self-employed lived in the Northern Harbour district (32.5 per cent) followed by a further 22.9 per cent in the Northern district.
  • Most of the self-employed remained within their district of residence for employment purposes.

Demographic details

Labour Force Survey estimates indicated that in 2017, total employment (excluding family workers) stood at 220,835, with the majority being employees (84.7 per cent). Self-employed persons amounted to 33,648 of which 22,814 (67.8 per cent) did not have any employees.

At 77.2 per cent, self employed persons tend to be predominately males. The highest share of self-employed persons was in the 35 to 44 age bracket, followed by persons aged between 45 and 54. The average age of self-employed persons was 44 years; 45 years for males and 42 years for females. On the other hand, an employee's average age was slightly less at 39 years; 40 for males and 37 for females.

 

Level of education

Nearly half of the self-employed population attained a low level of education (49.6 per cent). A further 27.9 per cent achieved a medium level of education while 22.5 per cent of the self-employed had a high level of education.

In 2017, self-employed females were evenly distributed across all education categories. Conversely, more than half of male self-employed had a low level of educational attainment (54.8 per cent). This comprises persons with less than 5 ordinary level or equivalent qualifications.

Employment characteristics

Type of employment

Out of every 100 self-employed persons, eighty four were employed on a full-time basis. Overall, results show a difference of nearly 22 percentage points between full-time self-employed males and full-time self-employed females (88.9 and 67.1 per cent respectively).

Shares of part-time self-employment were almost equally distributed between males and females (53.2 and 46.8 per cent respectively).

Labour Force Survey estimates showed that on average, the full-time self-employed worked 46.4 hours per week while part-timers worked 24.4 hours per week. Full-time self-employed females worked 44.1 hours per week, three hours less than their male counterparts (46.9 hours).

With an average of 40.6 hours per week, full-time employees worked 5.8 hours less each week compared to the hours clocked in by self-employed persons.

 

Occupation

The majority of employed persons were engaged in service and sales-related jobs (20.2 per cent and 26.7 per cent respectively). The second most common occupation group among the self-employed was craft and related trades (22.5 per cent) followed by managerial and similar jobs (14.6 per cent).

On the other hand, the second most common occupation group among employees was professional jobs (18.5 per cent) followed by technical and associate professional occupations (15.0 per cent).

When comparing the distribution of occupations between employees and self-employed, one finds that it is more likely for a professional to be employed as an employee whereas persons with jobs tied to crafts and related trades are more likely to be self-employed.

 

Economic activity

Over a third of the self-employed worked in wholesale and retail trade, transportation and storage, accommodation and food service activities (35.8 per cent), followed by professional, scientific, technical, administration and support service activities (14.1 per cent) and construction (14.0 per cent).

By contrast, most employees worked in public administration defence, education, human health and social work activities (29.2 per cent), wholesale and retail trade, transportation and storage, accommodation and food service activities (26.2 per cent) and in manufacturing, mining and quarrying and other industry (13.4 per cent).

When comparing the economic activity of the self-employed with that of employees, results from the Labour Force Survey show that the self-employed occupy a higher percentage in wholesale and retail trade, transportation and storage, accommodation and food service activities and construction, compared to employees (9.6 and 8.3 percentage points respectively).

Conversely, employees held a share of 25.1 percentage points more than the self-employed in the public administration, defence, education, human health and social work activities sector.

 

Economically dependent self-employed

The economically dependent self-employed are workers who perform services for a business under a contract different from a contract of employment. They depend on one or a small number of clients for their income and receive direct guidelines regarding how the work is done.

Self-employed without employees who are considered to be economically dependent self-employed, are those persons who have only one client, have no authority to hire staff, and/or have no authority to make important strategic decisions (International Labour Office, 20171).

This ad hoc module measures some characteristics of the economically dependent self-employed. In 2017, nearly 80 per cent of all self-employed persons had more than 9 clients in the preceding 12 months with the majority having no dominant clients (67.8 per cent).

A further 11 per cent had between 2 and 9 clients in the preceding 12 months whereas the remaining number of self-employed persons had one client or none.

More than 80 per cent of the self-employed with one client or more chose their working hours themselves. A further 10.6 per cent of the self-employed working hours were determined by their clients.

Why do persons opt to go into self-employment?

Over a third of the self-employed chose this professional status because a suitable work opportunity presented itself (11,209 persons). A further 6,632 persons stated it was the usual practice in their field of work, whereas 6,566 persons continued their family business.

Labour Force Survey results indicate that a higher share of females (12.5u per cent) wanted to be self-employed when compared to their male counterparts with the main reason being attributed to flexible working hours (6.6u per cent).

 

Main difficulties as self-employed

About 29 per cent of the self-employed did not encounter any difficulties in their current professional status. Among those who did face problems as self-employed, the main issue related to delayed payments or non-payments by clients (16.4 per cent), followed by lack of income in case of sickness (11.9 per cent) and periods of financial hardship (10.3 per cent).

The highest share of own account workers chose not to have employees due to the market conditions in which they operate, including insufficient amount of work (44.1 per cent). A further 40.6 per cent preferred to work on their own or did not want to expand their business. One in every four self-employed persons worked with a co-owner and/or in a network with other self-employed (24.5 per cent).

When asked about future plans related to hiring of employees, nearly 23 per cent of the self-employed were considering hiring more workers on a permanent or temporary basis or making use of subcontractors.

 

Comparison of self-employed and employees

Job satisfaction

The majority of employed persons were largely satisfied with their job (75.0 per cent), 19.1 per cent were satisfied to some extent, 4.3 per cent were satisfied to a small extent whereas 1.5 per cent were not satisfied at all.

When looking into job satisfaction in terms of one's professional status, it can be noted that the self-employed were more satisfied with their job compared to employees. Notwithstanding this, the level of job satisfaction was high for both professional statuses and in fact 81.5 per cent of the self-employed and 73.8 per cent of employees, were largely satisfied with their main job. The share of employees who stated not to be satisfied with their job was less than two per cent

 

Job autonomy

A large part of the self-employed felt that they had influence over both the content and the order of their daily tasks (85.0 per cent). Conversely, more than half of the employees felt that they do not have a lot of job autonomy (51.4 per cent).

 

Preference to change one's professional status

Overall, both employees (85.6 per cent) and self-employed (90.4 per cent) did not have a general attitude or showed willingness to change their current professional status. This indicates that, overall, employed persons are satisfied with their current professional status.

Results from the Labour Force Survey show that there was a higher share of employees who were willing to change their current professional status when compared to the self-employed (14.4 and 9.6 per cent respectively)

Around one in seven employees (14.4 per cent) were willing to work as self-employed. However financial insecurity (42.8 per cent), stress, responsibility or risk (19.6 per cent) and difficulties with getting finances for the business (19.2 per cent) prevented them from going forward with such a decision.

 

Commuting for employment reasons

In 2017, the majority of employed persons resided in the Northern Harbour district (32.1 per cent) followed by the Northern district (17.5 per cent) and the South Eastern district (15.4 per cent).

When looking into the location of the place of work, over a third (38.2 per cent) worked in the Northern Harbour district, 24.6 per cent in the Southern Harbour district and 12.1 per cent in the Northern district.

 

Self-employed persons

One in three of the self-employed population lived in the Northern Harbour district (32.5 per cent). The second largest group lived in the Northern district (22.9 per cent). Most of the self-employed live and work in the same district. Within the North Harbour District, Qormi, Sliema, Valletta and Birkirkara were the most common places of work.

 

Employees

A third of employees resided in the Northern Harbour district (32.1 per cent) followed by a further 16.5 per cent in the Northern district (Chart 11). When looking at the distribution of employment by place of work, the majority of employees worked in the Northern Harbour (39.4 per cent) and the Southern Harbour districts (25.9 per cent), mostly in Msida, Valletta and Qormi.


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