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Self-employment in the United States: an update
Steven Hipple
Following a long-term decline, the proportion of total employment made up
of self-employed workers has leveled off in recent years. In 2003, 10.3 million
workers were self-employed. The self-employment rate—the proportion of total
employment made up of the self-employed—was 7.5 percent, up slightly from the
rate in 2002. Reflecting the protracted shift away from agricultural
self-employment, the vast majority (90.8 percent) of the self-employed in 2003
were in nonagricultural industries; in contrast, this proportion was 56.7
percent in the late-1940s.
Information on employment and unemployment is available from the Current Population Survey (CPS).1 In addition to classifying employment by occupation and industry, the CPS subdivides employment by class of worker—that is, wage and salary employment, self-employment, and unpaid family work.
This article discusses the CPS measurement of self-employment, addresses historical trends in self-employment, and provides an overview of characteristics of the self-employed.
How are the self-employed measured in the CPS?
Since January 1994, employed respondents in the monthly CPS have been asked the following question: "Last month, were you employed by government, by a private company, a nonprofit organization, or were you self-employed?"
Individuals in the CPS who respond that they were employed by government, a private company, or a nonprofit organization are classified as wage and salary workers. Individuals who respond that they are self-employed are asked: "Is this business incorporated?" Individuals who respond "yes" are classified as wage and salary workers and are treated as employees of their own businesses. The "no" responses are classified as unincorporated self-employed—the measure that typically appears in Bureau of Labor Statistics publications.
This excerpt is from an article published in the July 2004 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1
The Current Population Survey (CPS) is a monthly sample
survey of about 60,000 households that provides information on the demographic
characteristics of the labor force and employment status of the noninstitutional
population age 16 years and older.
Labor Force Statistics from the Current Population Survey
Related Monthly Labor Review articles
Measuring
self-employment in the United States.—Jan./Feb.
1996.
Characteristics of self-employed women in the United States.—Mar.
1994.
On their own: the
self-employed and others in private business—May
1987.
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