Seth wrote, > >Hello. When self-employed people go out of business in the U.S., > >how are they accounted for in the official job stats?
Doug responded, > It's based on self-reporting. If people describe themselves as > self-employed and working, they're counted as such. If they describe > themselves as not working, they're either unemployed (if they're > actively looking for work) or not in the labor force (if they're > not). During recessions, laid-off workers frequently become > "self-employed," which may mean they're drumming up business while > pulling in little or no income. According to the BLS you are an employed person if either (1) you worked at least 1 hours for someone else (2) you "worked" in your own business, profession, .... It is possible that someone who has their own business, but has no work to do because they currently lack clients, might say that they _worked_ in their own businesses (trying to get clients, cleaning up the home office). They would be considered to be part of the labor force in this case as long as they continued to try to keep their business going. This would be true _even if_ such a person was looking for a job. If they give up their old business they might try to start a new businesses (rather than looking for a wage labor job) and, so, are then considered "not in the labor force." It is not clear how the BLS deals with self-employed who do start looking for wage labor jobs--they might be classified as a "job loser" or they might be classified as a "job leaver." The BLS definitions are not clear on how to deal with the self-employed who start looking for jobs elsewhere after a business fails. The situation Doug mentioned--laid off workers trying to start their own businesses and so no considered to be unemployed--certainly does happen. I don't have any idea, however, what percent of the unemployed do this. I'm not sure if the existing BLS data would permit--or wouldn't permit--this percentage to be discovered. Eric .
