There are more hybrid self-employed entrepreneurs in Germany than previously thought

Both the total number of hybrid self-employed entrepreneurs and their share of the labor force have increased significantly in Germany since 2001. In 2001, 2.46 million hybrid self-employed entrepreneurs were registered. In 2016, this number increased to 3.39 million. By 2016, their number also exceeded the number of exclusively self-employed for the first time.

“The tendency of hybrid self-employment has increased for both men and women as measured by the corresponding share of hybrid self-employed entrepreneurs in the workforce in Germany. However, the turnover among women is higher than among men because women start this form of employment. from inactivity more often,” says the director studies of dr. Rosemarie Kay. Men, on the other hand, move from dependent employment to hybrid self-employment more often than women.

Hybrid self-employed entrepreneurs are those who maintain the roles of self-employed and employees. IfM Bonn researchers quantified this work pattern for the first time using data from the Taxpayer Panel and examined its structure. They found that six out of ten hybrid self-employed entrepreneurs were employed before the switch, and only 26% were self-employed. Every year, about 700,000 people switch to hybrid self-employment, but almost as many leave during this period.

Hybrid self-employment mainly in the service sector

The vast majority (71%) of hybrid self-employed entrepreneurs work in the service sector, particularly in personal services (30%) such as education and training, health and social services, arts or entertainment and recreation. Almost 20% of hybrid self-employed service providers work in service-related jobs such as freelance scientific and technical services. About 18% of hybrid self-employed are active in trade, hospitality, transport/warehousing and information/communications. About 3% are self-employed in agriculture and forestry.

Hybrid self-employment is more common in West Germany than in East Germany. According to micro-census data, in 2016, about 8% of the workforce was hybrid self-employed. A comparison between East and West Germany shows that the share of hybrid self-employed in the labor force is about two percentage points higher in the West than in the East. East Germans also leave this form of work faster than West Germans. In contrast, exclusive self-employment is more widespread in East Germany than in West Germany.

The study “Development of hybrid self-employment in Germany; analyzes based on a panel of taxpayers 2001-2016” (German only) is available on the website of the Institute für Mittelstandsforschung (www.ifm-bonn.org).

Provided by the Small and Medium Enterprise Research Institute