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September 2010, Vol. 133, No. 9
Self-employment in the United States
Steven F. Hipple
Steven F. Hipple is an economist in the Division of Labor Force Statistics, Office of Employment and Unemployment Statistics, Bureau of Labor Statistics. Email: hipple.steve@bls.gov
About 1 in 9 workers was self-employed in 2009; as in the past, self-employment continues to be more common among men, Whites, Asians, and older workers, and in the agriculture, construction, and services industries.
Self-employment continues to be an important source of jobs in the United States. In 2009, 15.3 million individuals were self-employed, including both those who had incorporated their businesses and those who had not. The self-employment rate, which is the proportion of total employment made up of the self-employed, was 10.9 percent. Of all self-employed persons, 9.8 million, or nearly two-thirds, were unincorporated; the remaining 5.5 million were incorporated. From 2003 to 2009, the total self-employment rate has held steady; a small decline in the unincorporated self-employment rate was partially offset by a similar rise in the rate of incorporated self-employment. (See tables 1 and 2 and chart 1.)
Since the late 1940s, data on self-employment have been collected regularly as part of the Current Population Survey (CPS), the official source of data on employment and unemployment in the United States.1 In addition to classifying employment by occupation and industry, the CPS subdivides the employed by "class of worker"—that is, wage and salary employee, self-employed, and unpaid family worker. (See box, p. 40.) In 1967, it became possible to identify another group of self-employed workers: those who had reported themselves in the CPS as self-employed and had incorporated their businesses. Individuals choose to incorporate their businesses for a number of reasons, including legal and tax considerations. Since 1967, the official estimates of self-employment published by the Bureau of Labor Statistics (BLS, the Bureau) have included only the unincorporated self-employed. Although it is possible to identify the incorporated self-employed separately, these individuals are counted as wage and salary workers in the official statistics because, from a legal standpoint, they are employees of their own businesses.
This excerpt is from an article published in the September 2010 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.
Footnotes
1 The CPS is a monthly sample survey of about 60,000 households that provides information on the demographic characteristics of the labor force and the employment status of the noninstitutional population ages 16 and older.
Labor Force Statistics from the Current Population Survey
Self-employment in the United States: an update.—Jul. 2004.
Self-employment among older U.S. workers.—Jul. 2004.
Measuring self-employment in the United States.—Jan./Feb. 1996.
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