The number of individuals registered as self-employed in the UK has grown considerably
over the past decade. The economics literature generally agrees that the self-employed
work longer hours than their counterparts who are in paid employment and earn less.
However, most of the literature considers the self-employed as a homogeneous group of
individuals, whereas in reality, the term now encompasses a variety of very different
entrepreneurs, such as businesses or partnerships, sole traders, freelance workers and
sub-contractors. Using UK panel data, this paper examines the differences in the
characteristics of self-employed individuals by self-employment type to highlight the
difference between these groups and their employed counterparts. Random effect probit
estimations that model the determinants of being in different self-employment groups
highlight the heterogeneous nature of self-employment and their different determinants.
Wage estimations reveal different returns to separate classifications of self-employment
