Self-employment examined

Albarracín, Daniel

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Self-employment examined

Published: 9 March 2004

Recent figures indicate that self-employment started to increase in Spain in late 2003, following some year of decline. Self-employed people make up around 16% of the active population.

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Recent figures indicate that self-employment started to increase in Spain in late 2003, following some year of decline. Self-employed people make up around 16% of the active population.

Recent figures from the National Institute of Statistics (Instituto Nacional de Estadística, INE) Survey of the Active Population (Encuesta de Población Activa, EPA) indicate that the number of business-owners/entrepreneurs (with or without employees) in Spain has remained fairly stable since the mid-1970s, at around 2.5 million-2.7 million - see table 1 below. The number of economically active people has increased over this period, but this is mainly due to an increase in the number of wage-earners.

**Table 1. Number of business-owners/entrepreneurs, and total economically active population, 1976-2003 (000s)**
.	Total active population	Entrepreneurs with or without employees (both sexes)	Active men	Male entrepreneurs with or without employees	Active women	Female entrepreneurs with or without employees
1976	12,668.80	2,632.10	9,075.40	2,073.40	3,593.30	558.8
1977	12,591.60	2,586.50	9,027.60	2,039.50	3,563.90	547.1
1978	12,325.50	2,553.50	8,857.40	2,045.80	3,468.10	507.7
1979	12,162.40	2,570.40	8,728.50	2,061.70	3,433.90	508.8
1980	11,790.50	2,521.50	8,486.50	2,001.90	3,304.10	519.5
1981	11,521.30	2,445.70	8,327.60	1,950.60	3,193.70	495.1
1982	11,477.80	2,463.00	8,228.90	1,961.20	3,248.90	501.8
1983	11,414.00	2,510.70	8,116.20	1,974.50	3,297.80	536.2
1984	11,040.20	2,509.80	7,866.50	1,992.70	3,173.80	517.1
1985	11,056.30	2,460.80	7,856.60	1,927.00	3,199.70	533.8
1986	11,359.20	2,472.00	8,062.50	1,916.50	3,296.70	555.6
1987	12,011.10	2,589.40	8,365.30	1,957.60	3,645.90	631.9
1988	12,371.20	2,580.20	8,619.40	1,972.00	3,751.80	608.1
1989	12,781.70	2,556.60	8,809.80	1,962.50	3,971.90	594.1
1990	13,041.80	2,500.70	8,920.70	1,907.20	4,121.00	593.5
1991	13,015.10	2,517.90	8,829.20	1,906.40	4,185.90	611.5
1992	12,616.80	2,529.00	8,458.70	1,896.10	4,158.10	632.9
1993	12,203.30	2,477.00	8,097.60	1,860.60	4,105.70	616.4
1994	12,278.00	2,492.60	8,130.40	1,864.30	4,147.60	628.3
1995	12,590.00	2,562.40	8,254.80	1,870.00	4,335.20	692.4
1996	12,999.70	2,607.70	8,464.50	1,932.50	4,535.30	675.2
1997	13,446.20	2,610.50	8,720.00	1,941.80	4,726.20	668.7
1998	14,018.70	2,655.80	9,097.80	1,962.20	4,920.90	693.6
1999	14,824.70	2,611.80	9,454.20	1,936.30	5,370.50	675.5
2000	15,642.70	2,682.40	9,876.10	1,982.60	5,766.60	699.8
2001	16,121.00	2,760.20	10,109.30	2,022.20	6,011.70	738.0
2002	16,377.30	2,710.40	10,165.00	1,993.30	6,212.20	717.0
2003	16,862.00	2,737.80	10,323.10	1,982.50	6,538.90	755.4

Source: own elaboration based on EPA figures.

With the economically active population growing but the absolute number of business-owners/entrepreneurs remaining stable, the latter now make up a smaller proportion of the former - see table 2 below - falling from nearly 21% in 1976 to just over 16% in 2003. However, the absolute number of female business-owners/entrepreneurs has increased over his period, and they make up an increasing proportion of all business-owners/entrepreneurs - around 28% in 2003, compared with 21% in 1976. Nevertheless, the great majority are still men.

**Table 2. Business-owners/entrepreneurs as % of economically active population, 1976-2003**
.	Entrepreneurs with or without employees (both sexes) as % of active people	Male entrepreneurs with or without employees as % of active men	Female entrepreneurs with or without employees as % of active men	Female entrepreneurs with or without employees as % of all entrepreneurs
1976	20.78	22.85	15.55	21.23
1977	20.54	22.59	15.35	21.15
1978	20.72	23.10	14.64	19.88
1979	21.13	23.62	14.82	19.79
1980	21.39	23.59	15.72	20.60
1981	21.23	23.42	15.50	20.24
1982	21.46	23.83	15.45	20.37
1983	22.00	24.33	16.26	21.36
1984	22.73	25.33	16.29	20.6
1985	22.26	24.53	16.68	21.69
1986	21.76	23.77	16.85	22.48
1987	21.56	23.40	17.33	24.40
1988	20.86	22.88	16.21	23.57
1989	20.00	22.28	14.96	23.24
1990	19.17	21.38	14.40	23.73
1991	19.35	21.59	14.61	24.29
1992	20.04	22.42	15.22	25.03
1993	20.30	22.98	15.01	24.88
1994	20.30	22.93	15.15	25.21
1995	20.35	22.65	15.97	27.02
1996	20.06	22.83	14.89	25.89
1997	19.41	22.27	14.15	25.62
1998	18.94	21.57	14.09	26.12
1999	17.62	20.48	12.58	25.86
2000	17.15	20.07	12.14	26.09
2001	17.12	20.00	12.28	26.74
2002	16.55	19.61	11.54	26.45
2003	16.24	19.20	11.55	27.59

Source: own elaboration based on EPA figures.

Out of the total number of business-owners/entrepreneurs (with or without employees) in 2003, 2,571,700 were self-employed workers and owners of 'micro-enterprises', representing 93.9% of the total.

Analysing the members of the social security system by type - see table 3 below - it appears that in times of economic prosperity the proportion of self-employed workers tends to decrease, while in times of recession it increases. In 2002, a downward trend in the proportion of people registered for social security who were self-employed, which started in the mid-1990s, was virtually halted.

**Table 3. Self-employed workers as % of people registered for social security, 1982-2003**
1982	16.15
1983	16.61
1984	17.50
1985	17.92
1986	18.70
1987	18.46
1988	18.06
1989	17.45
1990	17.26
1991	17.24
1992	17.54
1993	18.15
1994	18.54
1995	18.68
1996	18.56
1997	18.17
1998	17.88
1999	17.34
2000	17.01
2001	16.65
2002	16.52
2003	16.50

Source: Monthly statistical journal of the Ministry of Labour and Social Affairs. All figures for December each year, except 2003 for which the figure is for October.

The General Workers’ Confederation (Unión General de Trabajadores, UGT) has recently analysed trends among self-employed workers and owners of micro-enterprises (individuals and very small companies). Based on EPA data for 2003, UGT concludes that:

the number of self-employed workers who work independently without employees increased in the fourth quarter of 2003 (by 14,300), though it fell over the whole year (by 21,500). The difference is due to a smaller number of young self-employed workers;
the number of self-employed workers and owners of micro-enterprises increased by 7,100 in 2003 to reach a figure of 2,571,700. They employ 1,600,100 people; and
a progressive decrease in the number of members of their families employed by self-employed workers and owners of micro-enterprises continued, due to a process of 'regularisation' of the smallest companies, though there are still 260,000 such 'family assistance' workers, mostly women. For this reason, UGT considers that obstacles to the recruitment of the direct relatives of self-employed workers should be removed and their social security contributions should initially be subsidised.

Overall, the data indicate that fluctuations in the number of business-owners in Spain are mainly due to fluctuations in the number of self-employed workers and owners of micro-enterprises, who are clearly subject to the economic cycle. They form the majority of business-owners and in total employ a relatively large number of workers. Commentators claim that they suffer from a lack of social protection (ES0304106F) and that many of them are in fact economically dependent on other firms, though they are not formally recognised as wage-earners (TN0205101S).

Eurofound recommends citing this publication in the following way.

Eurofound (2004), Self-employment examined, article.