An Empirical Analysis of the Relationship between Independent Self-employed Worker Status and Worker Performance

In recent years, the number of independent and self-employed workers, i.e., workers who are commissioned to perform work without being employed and who receive remuneration directly without hiring others, has been increasing. On the other hand, the issue of their employer-subordinate status has been debated as to whether or not they are protected by labor law. However, the actual situation of workers having an independent and self-employed status and its impact on worker performance has not been sufficiently clarified. Therefore, in this paper, we define a term “worker-ness” and confirm that about 40% of the 2251 independent self-employed workers have worker-ness. We also empirically analyze the impact of worker-ness on the performance of independent self-employed workers.

The results showed that workers with high dependency on employers were associated with lower hourly wages, longer working hours, lower subjective productivity, lower happiness, job satisfaction, and life satisfaction, and negative effects on health, mental health, and work engagement. Controlling for past work experience and reasons for being independent and self-employed, we confirmed that higher dependency on employers still negatively affected many of the performance variables. Finally, we confirmed that fixed business relationships positively affect worker performance and abuse of dominant positions negatively affected worker performance, confirming the robustness of our findings on the negative effects of dependency on employers.

These results suggest that while both competition law and labor law are currently being addressed to protect independent self-employment, it is desirable to understand the reality of dependency on employers, especially from the perspective of worker performance.