Findings from September 2020 using the UK Labour Force Survey and Understanding Society
The significance of the impact of the COVID-19 pandemic on the self-employed cannot be understated. In 2019, the self-employed represented 15.3% of the UK workforce, having seen substantial growth over the years preceding the arrival of the global pandemic. The first national lockdown at the end of March 2020 resulted in the reversal of this strong trend towards self-employment back to 2016 levels.
Our research using the UK Labour Force Survey and the Understanding Society COVID-19 Study, has revealed that this initial decline in self-employment continued over the summer of 2020 when lockdown restrictions were partially lifted. Exits from self-employment, earnings losses and reduction in hours were ongoing through September 2020. Our most recent analysis and report expands on the social, regional and industrial variations within these unprecedented changes to self-employment in the UK.
There is no region or nation that was not affected by a decrease in its number of self-employed individuals in the 3rd quarter of 2020 compared to 2019. However, London’s particularly dramatic drop in self-employment in April to June 2020 stabilised over the July to September 2020 period. It was Wales, Northern Ireland, the South East, East Midlands and West Midlands which saw the greatest declines in self-employment in the 3rd quarter 2020. Contrastingly, Scotland experienced only a moderate decrease, although its self-employment rate remained one of the lowest in the UK.
The decrease in self-employment by social groups was particularly pronounced among men, young people, those without a degree and ethnic minority groups. Because male self-employment decreased more than female self-employment, the gender gap has become slightly smaller than in pre-crisis times. In 2019 on average, 33.3% of the self-employed were women. This proportion was 34.9% in the 3rd quarter 2020.
Female self-employment, however, has been harder hit by this pandemic-induced crisis than male self-employment in terms of earnings losses and reductions in hours paid. Large proportions of both male and female self-employed experienced reductions in hours worked and net earnings. Since June 2020, however, self-employed women experienced a significantly greater negative impact on their hours worked than self-employed men.
Dr Darja Reuschke, University of Southampton, firstname.lastname@example.org
Victoria Price, University of Southampton, email@example.com