Description
Two features of the labour market for vocationally qualified workers are explored in this technical paper: the likelihood of self-employment versus wage employment and the determinants of income. The analysis showed that demographic, occupational and local labour market characteristics all influence the likelihood of self-employment. Self-employed people were more likely to be older, married and born in a non-English speaking country. High self-employment was found for managers, males in construction and female hospitality managers. Generally, employees were shown to earn more than self-employed workers, suggesting that the self-employed are willing to sacrifice monetary income for other perceived benefits of self-employment.
Summary
About the research
Using a 5% sample taken from the 2006 Census of Population and Housing released by the Australian Bureau of Statistics, this paper explores two aspects of people’s employment relating to vocational qualifications: the choice of self-employment compared with waged employment, and the income of the self-employed relative to employees.
Key messages
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Over a quarter of males with vocational qualifications were self-employed. By contrast, the rate for females was around 14%.
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The likelihood of self-employment varies according to demographic characteristics and occupation. Self-employed people with vocational qualifications are more likely to be older, married and to have been born in a non-English speaking country.
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The characteristics of the local labour market also influence the likelihood of self-employment. Higher unemployment rates in an area discourage vocationally qualified people from becoming self-employed. The local industry mix also influences the probability of self-employment.
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Many of the factors that influence the decision on self-employment are also relevant to the incomes of full-time workers, such as being born in a non-English speaking country, occupation and local unemployment rates.
- Employees generally earn more than self-employed workers. This, together with the finding that self-employment is more likely in a buoyant labour market, suggests that the self-employed are willing to sacrifice monetary income for other perceived benefits of self-employment.
This paper is the second publication to come out of a research project investigating the labour market dynamics of workers with vocational qualifications. The first report, Where tradies work: a regional analysis of the labour market for tradespeople by Phil Lewis and Michael Corliss, is available from this page.
Tom Karmel
Managing Director, NCVER