The relationship between the percentage of self-employed and country GDP is an inverse relationship. This means that as GDP per capita increases, the percentage of self-employed workers decreases.
There are a few reasons for this. First, as countries become richer, there is a greater demand for skilled labor. This leads to more job opportunities in the formal sector, which are typically more stable and offer better benefits than self-employment.
Second, as countries become richer, governments have more resources to invest in social safety nets, such as unemployment benefits and healthcare. This makes it less necessary for people to take on the risks of self-employment.
Third, as countries become richer, there is a greater availability of credit. This makes it easier for people to start their own businesses, but it also means that they have the option to work for someone else if they prefer.
Of course, there are always exceptions to the rule. Some countries with high GDP per capita, such as the United States, still have a relatively high percentage of self-employed workers. This is because these countries have a strong entrepreneurial culture and a large number of small businesses.
Overall, however, the trend is clear. As countries become richer, the percentage of self-employed workers decreases.
Here are some additional research findings on the relationship between self-employment and GDP:
- A study by the International Labour Organization found that the self-employment rate is negatively correlated with GDP per capita. The study also found that the self-employment rate is higher in countries with less developed financial markets and less government support for small businesses.
- A study by the World Bank found that self-employment is more common in countries with high levels of income inequality. The study also found that self-employment is more common among women and young people.
- A study by the European Commission found that self-employment is more common in countries with flexible labor markets. The study also found that self-employment is more common in countries with strong social safety nets.