Self-employed Brits are working longer and harder than their employee counterparts yet are less satisfied with how long they have to work until retirement.
Uncertainties intrinsic to ‘going it alone’ such as irregular pay are driving Britain’s smallest company owners to work long hours for income below that of permanent staff.
Such is the finding of a study by the Economic and Social Research Council, which analysed the changing nature of self-employment by comparing the UK to the US.
It found that despite government rhetoric about encouraging women to start-up ventures, there is no evidence of growing female self-employment in the UK.
The introduction of flexible working arrangements and greater labour flexibility since the 1990s also failed to spur females’ entrepreneurial thoughts, the ESRC said.
The Council’s project, conducted by the University of Durham’s Centre for Entrepreneurship, did however suggest some key policies that could be adopted to boost start-up rates across the board.
In particular, the government should target younger workers rather than older ones when promoting self-employment, as fewer people make the jump later in life, the study claimed.
Any policy to promote the health of older staff workers would meanwhile act as a blow to entrepreneurship, it added, because tired business owners would be tempted to ‘go permanent.’
In contrast, attractive welfare benefits could relieve worries self-employed people have about income, thereby making ‘going it alone’ more financially appealing, as the study’s co-author explained.
“Greater, or potentially greater earnings around retirement age decreases the probability of retirement of the self-employed,” said Professor Simon Parker of the Durham Centre for Entrepreneurship,
“It seems to be, ‘Why stop whilst there's a good thing going?’ - a very understandable sentiment. Gender, health and family circumstances appear to have little bearing on entrepreneurs' retirement decisions.”
However the consensus among the entrepreneurs polled was that they were less happy than their employed colleagues to work from now until their early sixties. The study confirmed that as a group, self-employed people work longer hours and earn less money than their employee counterparts.
They also appear as determined and singled-minded individuals, or more kindly would be described as ‘keen to stick to their principles.’
“Younger entrepreneurs are significantly more sensitive to new information than the older ones” Prof Parker said, suggesting greater flexibility among the less experienced.
“However, overall the whole group adjust their expectations …in light of acquiring new information, by only 16 percent.”
The collective findings suggest while entrepreneurs do exploit new information, “they give greater weight to their prior beliefs when forming their expectations.”
For the future, the Council urged the state to ensure start-up programmes are open to people of all levels of experience, and backgrounds, as they strive to promote continuous “business awareness” and learning.
Apr 18, 2006
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