False self-employment: the role of occupations

PurposeThis paper analyses the relation between occupational characteristics and the probability that a worker in the Netherlands has a false self-employed arrangement instead of an employee arrangement. These are arrangements in which self-employed workers perform tasks in the hierarchy of the firm as if they were employees.Design/methodology/approachData from the Dutch Labour Force Survey is used to analyse the relationship between occupational skill, routine and wage level and the probability to be a false self-employed or a standard or non-standard employee.FindingsThe results show that the probability to be false self-employed decreases slightly with the skill level of the occupation, but there is no evidence that false self-employment is more likely in low paid, routine occupations. Workers in the lowest paid occupations are more likely to have a non-standard contract as an employee. False self-employment arrangements are more likely in the (lower) middle paid occupations. Finally, the results show that working in the highest paid occupations increases the probability of being in a false self-employed arrangement, but only in arrangements that are characterised by economic and organizational dependency. These are arrangements with financial dependency on one client for income combined with dependency on this client on when and where to work.Originality/valueThis study makes an important contribution to the literature on identifying vulnerable self-employed workers as well as to the literature on mechanisms behind the growth of solo self-employment.