A changing labour market?

This project was finalized in 2019. Below please find a description of the project.

The research project "A changing labour market? Increasing significance of self-employed activity" is part of the project "The benefits of education to society" funded by the The Rockwool Foundation. The project is a collaboration between Copenhagen Business School (Principal Investigator) and University of Southern Denmark.

The purpose of the project is to investigate if activities as self-employed vis-a-vis wage earners are playing a larger role on the Danish labour market today than they did in 2001. In other words it will be analyzed if ordinary wage earners, i.e. people whose primary income come from employment, are also increasingly working as self-employed and get a share of their income from one-man businesses. This is of interest because it indicates a labour market undergoing change, moving from full wage earner income to a set-up based on a mix of income from wage earner and self-employed activities.

In the mainstream media it is often mentioned that fixed positins with pension, continuing education and holiday pay are increasingly being replaced wiht new types of employment such as temporary employees, freelancers, contract employees and casual labourers. Thus it is claimed that jobs are becoming increasingly flexible. Sometimes is is mentions that more and more Danes want a more independent working life as a self-employed. It should be mentioned that it may be extra income from one-man business, e.g. lecture activity and consultancy that is increasing. At other times it is mentioned that the adaptability to change and flexibility of companies are increased by the ability to hire and fire faster. In this regard it is sometimes mentioned that more self-employed are entering the Danish labour market by way of "ar and leg companies" which are being used to lower salary costs and which may lead to social dumping.

It is unclear whether a set-up based on a mix of activities as a wage earner and self-employed is an expression of a more independent working life or reflects wage earners being pushed towards a jobs with less rights. However, various trends may indicate what an increasing number of wage earners with their own companies are an expression of. If one-man businesses are primarily established to hire "self-employed" instead of wage earners it is expected that more very small one-man businesses with no employees and with a relatively few activities emerge where companies cannot be regarded as being active in reality.

In the analysis we will carry out a number of detailed descriptive analyses. The purpose of the analyses is to answer the following questions:

• Has the number of self-employed increased in Denmark in recent years? If yes, which types of self-employed is it? Is the number of one-man companies with a limited financial activity increasing? Is the number of one-man companies where the owner has a fixed wage earner position, is more casually employed and shifts between having periods of employment and periods of unemployment increasing?
• Is the number of people who are gaining a surplus from self-employed activities either in terms of total income or as a supplement in terms of earned income increasing? If yes, how big a share does the surplus from self-employed activities consititute out of the total income and how has the delopment of this share been progressing?
• In which lines of business are the number of one-man business increasing in particular? Is there a variation in the number of active and inactive companies across lines of business? Particular focus will be on the development in building and construction activities.
• Which education background do people who start up one-man companies have? Is it primarily skilled workers who start up one-man companies or do people with all sorts of educational background start up one-man companies?