The self-employment rate index as a measure of economic trends : impact of heterogeneity of the self-employed on the quality of indicators

Abstract

Purpose: The aim of this part of the paper was to examine whether there are any observable trends between the number or percentage of self-employed in the labour market and business climate indicators, and can any conclusions be drawn whether the currently existing methods of monitoring labour are sufficient. Approach/Methodology/Design: In this paper, the hypothesis was tested that the self-employed are not a cohesive group. That is why labour market monitoring structure based on indicators related to “self-employment rate” is not sufficient to observe the trends in changes occurring in the contemporary labour market. Correlations between the business climate and labour market indicators and the various self-employed subgroups tend to be not similar. The group of self-employed is diverse and includes different areas and forms of work, which demonstrate varied tendencies and should be considered separately. Moreover, it includes groups that can now be formally separated, for example individual farmers, traditional and hybrid self-employed, employers. Findings: Our analysis clearly shows that the commonly used indicator "number of self-employed" or “self-employment rate” is inadequate for analysing trends in the labour market as it doesn’t showcase the complexity of problems related to changes in this market. This indicator should not be the basis for assessing economic trends, including those in the labour market. It is also insufficient for concluding about the very nature of labour and for monitoring Economy 4.0. Practical Implications: It is necessary to discuss the new classification of people who are active in the labour market. New indicators should be developed, to demonstrate changes in the labour market more accurately.