The media is full of stories about what’s happened to the stock market, overall job creation, and other economic measures since the start of the millennium. But little of this attention has been devoted to entrepreneurial activity. So I thought I’d summarize a few numbers about what happened to self-employment from 2000 through 2008.
Overall, growth in self-employment has been flat. The Bureau of Labor Statistics (BLS) data show that from 2000 through 2008, the total number of non-farm self-employed people increased only 0.2 percent, less than the rate of growth of the labor force.
However, the overall growth in self-employment masks differences in the goods and services sectors of the economy. From 2000 through 2008, self-employment shrank 2.6 percent in the goods sector, but grew 1.1 percent in the service sector (private households and the government are excluded from this calculation).
Even comparing the goods and services sectors hides wide variation across industries in what has happened to self-employment. In the table below, I’ve summarized the percentage change in the number of self-employed people in different industry sectors.
The differences between industry sectors are substantial. For instance, the number of people working for themselves in wholesale trade fell 15.3 percent from 2000 through 2008, but the number of self-employed in both educational services and mining increased 29.3 percent.
In short, from 2000 through 2008, the number of self-employed grew slightly, and did not keep up with the increase in the size of the labor force. The number of people working for themselves rose in the service-providing part of the economy, but fell in the goods-producing portion. Self-employment grew in some industry sectors, but shrank in others. Rates of growth were highest in mining and educational services and lowest in agriculture and wholesale trade.