Eurofound (2017a) shows a link between self-employment and involuntary part-time work: 16% of involuntary part-time workers working very short hours are self-employed, and this share has increased by 4 percentage points since 2008.
Figure 14: Temporary employment contracts as a share of all employees (%), EU Member States, 2007 and 2014
0 5 10 15 20 25 30 35
Decrease Increase
2007 2014
Note: * Break in time series in 2007; ** Break in time series in 2014.
Source: European Commission (2016), chart 2.7
The proportion of self-employed workers without employees as a share of all workers did not change between 2007 and 2014 in the EU. However, as Figure 15 shows, in about half of Member States, the proportion of self-employed workers without employees as a share of all workers rose, with the largest increases in absolute terms recorded in Greece (+4 percentage points) and the Netherlands (+3 percentage points). It is this group that on average faces the most substantial poverty risk (Conen et al, 2016).
Studies consistently demonstrate a strong and positive link between self-employment and in-work poverty. An increased prevalence of self-employment is seen as one of the main determinants of in-work poverty during the crisis ( Lohmann and Marx, 2008; Crettaz, 2011; Herman, 2014; Halleröd et al, 2015).11In fact, Halleröd et al (2015) report that the self-employed make up almost 40% of Europe’s working poor. On average, the relative poverty risk of the self-employed is three times higher than that
of salaried workers, and in some countries (for example, Finland, Romania and Slovakia), it is more than six times as high (Spasova et al, 2017).
On average, the risk of in-work poverty among self-employed workers without employees went up from 23% in 2007 to 25% in 2014, with increases of 3 percentage points or more recorded in Bulgaria (+13 percentage points), Romania (+11 percentage points), Germany (+9 percentage points), Luxembourg (+8 percentage points), Slovenia (+6 percentage points), Austria (+5 percentage points), Belgium and Cyprus (both +4 percentage points), and Italy, Portugal and Sweden (all +3 percentage points). However, once again a pattern of divergence is visible as there are also countries where the risk of in-work poverty among the self-employed without employees fell by 3 percentage points or more. These countries are Lithuania
(-8 percentage points), Hungary (-5 percentage points), Finland and the Netherlands (both -4 percentage points), and Spain (-3 percentage points).12
Figure 15: Self-employed workers without employees as a share of all workers (%), EU Member States, 2007 and 2014
0 5 10 15 20 25 30
Decreased Stayed around the same Increased
2007 2014 Source: Eurostat, Labour Force Survey 2007 and 2014
11 It is widely recognised that studies need to distinguish self-employment from normal wage employment. This is because in-work poverty among the self-employed has distinct characteristics, as well as the fact that survey data on wages and hours are less reliable for the self-employed (Marx and Nolan, 2014).
12 Author’s own calculations from Eurostat EU-SILC, data missing for Croatia, Denmark and Malta.
This chapter has provided an insight into how in-work poverty developed across EU Member States during the crisis years, looking at both the relative in-work poverty risk measure and the absolute material deprivation measure. When measured by relative income, data for 2014 show that the proportion of workers experiencing in-work poverty in the EU was 9.6%. However, if deprivation is used to measure in-work poverty, the figure rises to 12.8%. The in-work poverty risk indicator, because it is relative, does not show change over time if the majority of the population is affected. The material deprivation indicator, however, because of its absolute nature is less affected by changes in the median income.
In the majority of Member States, the development of in-work poverty during the crisis differs depending on which indicator is selected, although there are countries where the situation for both indicators was worse in 2014 compared with 2007.
Three groups of workers are particularly at risk of in-work poverty: involuntary part-time workers, workers on temporary contracts and self-employed workers without personnel. During the crisis, the incidence of
non-standard work and self-employment increased in many countries, which sheds further light on how in-work poverty developed during the crisis years as well as on the diverging trends between Member States.
Summary
While many of the studies that compare in-work poverty across the EU look at the characteristics of those affected, very little attention has been paid to what it means to be in work and poor. This chapter focuses on the well-being and social situation of people
experiencing in-work poverty (as measured by both relative income and deprivation) in comparison with the working-age population.13Aspects of well-being examined include subjective well-being, mental well-being, accommodation and living environment, and relationships and social exclusion, based on data from the EU-SILC 2013 module on well-being. Data from 2014 are used to provide additional accommodation-related variables, while data from the fourth European Quality of Life Survey (EQLS), carried out in 2016, provide further data on social exclusion. A broad picture of well-being and the social situation of workers at risk of poverty and experiencing material deprivation is presented, starting with their subjective and mental well-being, relationships and social exclusion. The focus then widens to examine the quality and cost of workers’
accommodation, and their broader living environment.