Many hybrid self-employed benefit from their permanent employment

The number of hybrid self-employed and their share of the total workforce has increased significantly since the turn of the millennium. In 2016, their number exceeded that of the exclusively self-employed for the first time. Accordingly, hybrid self-employment has a significantly higher significance for the labor market and social security systems than previously assumed. Therefore, researchers at the IfM Bonn have used the Taxpayer Panel to examine the respective income and pension provision capacity of hybrid self-employed workers.

Most hybrid self-employed (90%) focus their work on a dependent activity—for nearly every ten hybrid self-employed, self-employment is the primary activity. "The majority of hybrid self-employed is probably able to make sufficient provisions for their old age," reports IfM researcher Dr. Olivier Butkowski.

The number of hybrid self-employed and their share of all employed persons have increased significantly since the millennium turn. While in 2001, around 2.46 million people were still working in this employment form, in 2016, there were already 3.39 million hybrid self-employed.

This year, for the first time, their number exceeded the number of exclusively self-employed people. Thus, it has a much greater significance for the labor market and social security systems than previously assumed.

Funded by the German Pension Insurance's German Research Network on Old-Age Provision and based on data from the Taxpayer Panel, Dr. Olivier Butkowski and Dr. Rosemarie Kay investigated the hybrid self-employment significance and old-age provision capability.

This analysis showed that in the period studied from 2001 to 2016, one of two hybrid self-employed persons earned a gross wage between 30,000 and 60,000 euros and also had profit incomes.

"For around 26% hybrid self-employed, we are talking about a medium level of old-age provision. This part is insured for old age through employment, subject to social security contributions. At the same time, it would not be possible for them to make adequate provision for their old age," explains Olivier Butkowski. However, almost one in three of them also has additional income.

He sees only 18% of the hybrid self-employed with too little ability to provide old age because they only pay minimum contributions into the statutory pension scheme from a marginal dependent job. "If income from self-employment accrues at all, it usually cannot be used for additional old-age provision. Nevertheless, we cannot exclude that other income (for example, from renting and leasing) will contribute to old-age provision," the IfM researcher says.

Provided by Institut für Mittelstandsforschung (IfM) Bonn