A methodologically ground-breaking new study from the Centre for Research on Self-Employment (CRSE) shows that self-employed people enjoy better levels of life satisfaction and well-being than their employed counterparts.
The study moved beyond the narrow, conventional, metric of economic success, to include subjective assessments by self-employed people, who included many contracting professionals. Adopting these more overarching measures, which included job satisfaction, health, family life, and leisure, the study found that wellbeing was significantly higher among the self-employed.
The research also identified areas for policymakers to address to take better account of the full range of self-employment. There were variations in the life satisfaction levels reported by different segments of the self-employed, which led the authors to propose recommendations to improve the wellbeing of those where the measures were lower:
Improving and speeding up access to mentoring for the newly self-employed and for those undergoing periods of business crisis. This would help diminish stress and boost confidence in challenging times and could be facilitated by integrating mentoring into job centres.
Boosting confidence by improving access to skills development resources, a step that should include moves by the Treasury to (a) extend tax allowances to cover the costs of acquiring new skills and (b) to provide the self-employed with training vouchers.
Overcoming the isolation some self-employed people experience by creating more co-working spaces. This would allow independent workers from similar or different fields to work together, share insurances, childcare, and business-relevant services. A collaboration between co-operatives, professional organisations, and government, working to incentivise the creation of more such spaces could achieve this.
Cancel, or improve the low uptake, of the New Enterprise Allowance (NEA) by offering parallel training and mentoring opportunities, which may attract people who have embraced self-employment because of insufficient employment opportunities.
Welcoming the study, Chris Bryce, CEO of the Association of Independent Professionals and the Self Employed (IPSE) said it provided clear evidence that becoming one’s own boss, choosing one’s own work projects, and having the freedom to decide how and when to work can significantly improve wellbeing for millions of people across the country.
The report’s author, Martin Binder, Professor of Economics at Bard College Berlin, said that conventional methods of focusing only on income or job creation were too narrow to gauge the self-employment experience. He added: “Putting the overall life satisfaction of the self-employed centre stage gives us a much more comprehensive picture of how they are doing – beyond just their income.” He summarised that there was limited value in promoting more self-employment if it then caused more anxiety or stress for prospective flexible workers.