Self-Employment in the United Kingdom During the 1980s and 1990s

Data from the British Household Panel Survey (BHPS)are used to study recent developments in self-employment in the United Kingdom,including the determinants of entry to and exit fromself-employment.Aggregate trends in self-employment arediscussed.Examples of such trends include the rapid growth ofself-employment rates in the 1980s and the unusually high self-employment rateamong people past the average retirement age. The BHPS data are supplemented with retrospective information onrespondents' employment histories.Findings suggest that deregulation offinancial markets and easy access to capital led to the self-employment upsurgein the 1980s.Many of that decade's trends, including the increases ofself-employment among women and young people, have dwindled. There isevidence, however, of ongoing changes in self-employment rates. Today, U.K.self-employment is concentrated in the service sectors.Also, femaleself-employment is rarer and less stable than male self-employment. Generally, entry propensities increase with age, while exit propensitiesdecrease. After a certain age, however, entry propensities plateau anddecline.Finally, there is a very strong relationship between anindividual's prior occupational status and his or her self-employment status.(SAA)