Self-Employment in the United States: An Under-researched Topic

1
Self-Employment in the United States An
Under-researched Topic

• Bill Beyers
• Dept. of Geography
• University of Washington
• Seattle Economists Club February 4, 2015

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Overview of Presentation

• A brief look at background literature
• Alternative estimates of self-employment
• National trends in wage salary and
  self-employment
• Geographic patterns of self-employment
• Changes in wage salary and self-employment in
  the Great Recession

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Background Literature

• Marshall Wood lean on Christophersons work,
  viewing self-employment as an aspect of
  flexibility in the labor force.
• Rubalcaba viewed it as an employment opportunity,
  especially for women
• Dickson argues Lone Rangers are related to
  declining sectors, but questions if there are
  bases to reverse these declines
• Beyers Lindahls Lone Eagles
• Various case studies
• BLS work based on the Current Population Survey
  the U.S. Census nonemployer program BEA
  proprietors/self employment estimates

4
Dawson, Henley Latreilles UK survey of
motivations for self-employment
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Data Sources

• BEA data online
• Series SA- 25 Full part-time employment by
  industry
• Series SA 27 full part-time wage and salary
  employment by industry
• The difference between these two series is the
  level of self-employment by industry
• Data were developed for states in 1990, 2007, and
  2011
• Data also from Census Nonemployer Series and BLS
  estimates of self-employment from the Current
  Population Survey

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U.S. Total Self Employment (1)
BLS data exclude incorporated self-employed
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U.S. Total Self-Employment (2)
BLS data include incorporated self-employed
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National Total Employment
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Location Quotients All self-employment 2011 -
BEA
Alaska 0.96 Hawaii 0.93
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Location Quotients BEA Producer Services 2011
Alaska 0.73 Hawaii 0.99
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Location Quotients BEA Arts, Entertainment and
Recreational Services 2011
Alaska 1.23
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Shift-Share Analysis - BEA

• A technique that allows focus on changes in
  regions compared to national change
• Three models 1990-2007 2007-2011 1990-2011

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BEA Competitive Shift 1990-2007
Alaska 0.9 Hawaii 0.6
Percentages are of total positive or negative
shift values
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BEA Competitive Shift 2007-2011
Alaska -1.0 Hawaii -1.2
Percentages are of total positive or negative
shift values
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BEA Cluster Analysis

• Used Wards algorithm to define clusters of 6
  industry groups for the year 2011

Small clusters only 3 states each
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Cluster Classification of State Self-Employment
2011 - BEA
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Correlations
Highly significant correlations for all
comparisons. What does this mean regarding the
choice of the data source used to
measure proprietors activity? Should these
federal agencies attempt to reconcile their
measures of proprietors?
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Self-Employment in the Great Recession

• The next few slides explore changes in
  self-employment by industry in the Great
  Recession
• While wage salary employment had a steep
  decline, BEAs measure of self-employment kept
  growing
• But there were different experiences by industry,
  as reported in the next slide

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Change in Wage Salary and Self-Employment
2007-2011
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Finance Change WS SE
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Real Estate Change WS SE
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Administrative Services Change WS SE
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Arts, Entertainment and Recreation Industry
Change WS and SE
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Other Services Change WS SE
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Concluding Comments

• The rapid growth of self-employment in the U.S.
  has varied geographical patterns, and correlates
  with industry and other variables
• Little research has been reported on the
  geography of self-employment
• Earnings from self-employment still must be
  analyzed
• Business-cycles have impacts on patterns of
  self-employment growth
• There are clear differences in the level of
  self-employment reported by the 3 federal
  agencies, but their geographic concentration
  appears have similarities