Solo self-employment and alternative work arrangements: a cross-country perspective on the changing composition of jobs

Alternative work arrangements, such as solo self-employment and gig-economy work, have been on the rise in most OECD countries. Yet, we still know too little about them. Drawing on ad-hoc surveys run in the UK, US and Italy, we document that solo self-employment is substantively different from self-employment with employees, being an intermediate status between employment and unemployment, a new frontier of under-employment. Its spread originates a strong demand for social insurance which rarely meets an adequate supply given the informational asymmetries of these jobs. Enforcing minimum wage legislation on these jobs and reconsidering the preferential tax treatment offered to self-employment could discourage abuse of these positions to hide de facto dependent employment jobs. Improved measures of labor slack should be developed to acknowledge that, over and above unemployment, some of the solo self-employment and alternative work arrangements present in today’s labor market are placing downward pressure on wage growth.