California is the most persuasive case for that view.

That's the true rot in all of this, when there are internal divisions.

You're right. Strange, possibly an error. The original OECD stats (country profiles) include Japan with a self-employment rate of 12.9% for 2007, so on a par with Australia in the middle of the chart.

I read hints of structural rigidity in the EU from what you posters are stating. I have met others on-line that think self-employment is high because even hiring the first additional new employee is so fraught with legal complications that he prefers to only work as a single worker firm.

I hope that makes sense and someone might comment on that reluctance of even taking on additional help.

Rutherfordian ------------------------------ RDRutherford

There may be differences between countries, but, to take the example of temp workers: you may be employed by a temp agency and placed in a temp job; or directly hired for a specified contractual period by the company that needs the work done. In those two cases, you're a wage-earner and there are payroll taxes (social contributions, benefit schemes) to pay for the employer, and paperwork to go with that. Or you are self-employed and you bill the company for a fee for your work (contractually agreed). The employer doesn't have payroll taxes to meet, you deal with your social contributions (pensions, etc) yourself, along with the paperwork.

That is legally and administratively more sharply defined than just statistical classification after the fact.

The CEPR paper does go on to compare (as far as there are comparable stats) small and larger businesses in manufacturing. Where it appears that 35% of manufacturing employees in Greece work in businesses of less than 20 employees, while the comparable figure in the US is 11%; when the ceiling is set at 500 employees, that covers 75% of Greek manufacturing employment, while only 51% in the US (ie nearly half of US manufacturing employment is in companies of over 500 employees).

Pardon me. I have some academic experience with these classification problems.

First, firm size. OECD data analyses are often problematic because of member reporting by class, small-, medium- and large firms in any given industry. Classification varies, for example, a small-sized firm may be one that employs full-time equivalents (FTEs), 1-25 or 1-100; a medium-sized firm population range may be 26 - 500 or 101 - 5,000; a large-sized firm population range may be any number > 500 or > 5,000, i.e. otherwise unspecified. Each OECD member reports firm population by class. You will find in review of the literature, an OECD economist then decides how best to qualify further --signified by "description of" or "transformation of" or "harmonization of"-- data sets for a particular analytic purpose, e.g. investment or output by firm class by geographic area.

AFAIK, BLS stopped collecting and publishing firm size distribution in 2005. I assume, whatever information the agency reports to OECD are estimates, derived perhaps from B/D modeling and MoM establishment and HH surveys.

Second, employee classes. Salaried persons are employees, where an employer claims exclusive use of and compensation for labor by contract. Part-time workers are capital expenses and may or not be included in reported firm census data unless as in FTE (hours), depending on member methodology. AFAIK, OECD members report, under separate cover, part-time worker population and characteristics collected from HH census.

"Temps" or part-time workers or "contractors" (individuals NOT firms) are self-employed. Contract terms of temporary employment are irrelevant to the fundamental relationship between buyer and seller, i.e. non-exclusive compensation for labor. In the US, as you know, self-employed persons (sellers) are differentiated from salaried and wage earners by format of income reporting by employers (buyers) to the IRS: 1099 and W2, respectively.

Some "full-service" temp agencies function like brokers, collecting mark-up per hour per person placed with its employer-clients in exchange for automated tax withholding and income disbursements to employee-clients.

The IRS may publish a data series of 1099s derived from all returns history. I don't know.

Diversity is the key to economic and political evolution.