Jobless opt to start their own businesses

The percentage of jobless workers starting their own businesses has more than doubled in a decade and there is no evidence they are being forced into self-employment, according to a study published today. The proportion of people leaving the dole to run their own affairs - normally the "best" workers - has risen from just 17 per cent in the 1980s to nearly 40 per cent, the latest figures reveal.

Ministers will greet the findings of the research, conducted for the Government's Employment Service by the Policy Studies Institute, as evidence that a new entrepreneurial Britain is being created.

The report, "Moving In and Out Of Self-Employment", points out that the practice has grown from 7.3 per cent of the workforce in 1979 to 12.9 per cent in 1993.

Authors Alex Bryson and Michael White suggest that self-employment can be a "useful" route back into work for some unemployed people, but argue that more caution is needed in identifying those who are likely to succeed.

The authors said that the best workers normally used this method to get back into the labour market - those with more experience and better qualifications. They were more likely to be married or co-habiting and to own their own homes.

Half those becoming self-employed did so in the first six months of their search for work and so the authors argue that their decision was not the result of long-term failure to secure a job.

Most tended to work harder, putting in longer hours than any other group of the newly self-employed.

There was some evidence, however, that more companies were requiring workers to be self-employed in jobs which would once have been occupied by a member of staff.

Most job-seekers moved into self-employment in the craft or construction industries, although others took work in professional occupations like sales, education and welfare.