Which of the following describes your current employment status?
- Employed by others in full-time work
- Employed by others in part time work
- Other (could be unemployed, retired, homemaker, etc.)
This is a question asked in GEM’s latest (Summer 2020) Adult Population Survey of a random sample of at least 2,000 adults aged 18-64 years in each of the 43 participating countries. Note that describing your status as self-employed is not the same as being an entrepreneur based on GEM’s strict criteria. You can of course be employed, or a student, or a homemaker, and still be starting a business.
Knowing employment status before and during the first wave of the pandemic turns out to be very revealing, not just for the overall levels of employment and self-employment, but also for the pattern of change that is captured. For example, some Employed people had become Self-Employed, many were still Employed and some had become Other.
The pattern for the full sample of 135,914 individuals across 43 economies is set out in Table 1. Note that while each economy’s Adult Population Survey is of a representative sample of adults, the 43 economies are not necessarily representative of the world or its global regions. For example, Europe and North America and the Middle East are well represented in the GEM APS in 2020, while Latin America and Caribbean, Africa and Central and East Asia are less so. Australasia and Pacific are not at all represented. So care must be taken in interpreting results.
The table shows 28,169 people calling themselves Self-Employed before the pandemic, or 20.7% of the 135,914 adults. The Self-Employed column shows that for every 1,000 of those, 806 were still Self-Employed in summer 2020, but 92 had changed their status to Employed, and 102 had become Other. This does not mean that self-employment fell by nearly a fifth, because for every 1,000 adults regarding themselves as Employed before the pandemic, 42 had become Self-Employed and 125 had changed their status to Other. Of the 34,777 adults in the Other category before the pandemic, 5.1% had become Self-Employed and 9.4% had changed their status to Employed.
- The net consequence is that the percentage of adults categorising themselves as Self-Employed actually changed very little – a fall from 20.7% to 20.3%.
- The big change in status was in those regarding themselves as Employed, falling from 53.7% of adults to just 49.0%, a fall of just under one in ten of the previously employed.
- The Other category increased from 25.6% of adult’s pre-pandemic to 30.7% in 2020, an increase of about one-fifth.
Table 1. Employment status before and during the Pandemic, % of each category, 43 economies
Table 2 expresses the same data in terms of the percentage of all adults in each category. Then 16.7% of all adults were Self-Employed before the pandemic and still Self-Employed in summer 2020. However, in addition to these, another 3.6% of all adults had changed their status to Self-Employed during the pandemic, both from the Employed (2.3%) and from the previously Other (1.3%). Table 2 presents a picture of the multiple category changes that are hidden in the simple comparison of category totals.
Table 2. Employment status before and during the Pandemic, % of adults, 43 economies
It is no surprise that economies have been impacted very differently by the pandemic, as Self-Employment and Employment status data clearly demonstrate. The analysis of the previous section should be kept in mind: focusing only on category totals hides a myriad of changes within each economy.
Figure 3 sets out the percentage of adults within each economy regarding themselves as Self-Employed, pre- pandemic and in Summer 2020. There is substantial variation, with (pre-pandemic) six of the 43 economies having less than one in ten of adults describing themselves as Self-Employed, all from Europe and North America, while ten economies had three out of ten or more of all adults regarding themselves as Self-Employed: four from the Latin America & Caribbean global region, three from the Middle East & Africa, two from Central & East Asia and, and just one from Europe & North America. By far the highest level of Self-Employment was more than seven out of ten adults in Togo.
Comparing Self-Employment before the pandemic to Summer 2020 presents a very mixed picture. Most changes are small: notable exceptions include a dramatic fall in Canada (from 31% of adults to just 19%), and smaller falls in Angola and Brazil. There were sharp rises in Oman (from 20-30%) and in Greece (for 20-28%), and smaller rises in Colombia and in Slovenia.
The share of adults employed by others is good indication of the level of development in a particular economy. Pre-pandemic, 10 of the 43 economies had two out of three or more of their adults regarding themselves as Employed. Eight of these were in Europe & North America, and two were from Middle East & Africa. By Summer 2020, this total had fallen to just four. Five economies, all categorised by the World Bank as Low-Income, had, pre-pandemic, less than one in three adults regarding themselves as Employed. By Summer 2020, this number had risen to eight, adding the one absent Low-Income economy, plus two Middle-Income economies.
Table 2 had shown Employment at 53.7% of adult’s pre-pandemic, falling to just 49% at the time of the 2020 APS data collection. That overall average hides considerable variation. The percentages Employed pre-pandemic, and in Summer 2020, are set out in Figure 4, with Latin America & Caribbean hardest hit. While in 37 of the 43 economies the percentage Employed fell, the largest falls were in Latin America & Caribbean: Panama (from 50% to 35%), Chile (from 57-42%), Brazil (47-36%), Guatemala (43-32%) and Colombia (42-31%). There were other large falls in Egypt, Angola, Switzerland, and Germany.
Whilst Employment was falling elsewhere, seven economies experienced an increase in the share of Employed adults, with the largest being Kazakhstan (from 41-50%) and Oman (48-52%).
This analysis presented a sobering picture of the early impact of the pandemic, as measured by changes in self-reported employment status. Although aggregate proportions of adults regarding themselves as Self-Employed had changed relatively little, mostly because of the many people moving into Self-Employment from the Employed and Other categories, those adults regarding themselves as Employed had fallen dramatically in many economies, especially, but not exclusively, in Latin America and the Caribbean. Of the 43 economies, 15 had the proportion of those adults Employed falling by more than one in ten between the start of the pandemic and Summer 2020. Global impact is evidenced by the inclusion of four economies in Europe & North America (Spain, Switzerland, Canada and the United States), all six of the Latin America & Caribbean economies ,and five economies from the Middle East and Africa (Togo, Angola, Egypt, Morocco and the United Arab Emirates). More than half of these economies are categorised by the World Bank as High-Income.
High levels of government support for business (or the lack of it), may prove to be a key influence on Employments impacts. For now, note that neither location nor high income has provided immunity from the economic effects of the pandemic.
Professor Stephen Hill is the lead author of the GEM 2020/2021 Global Report.