Necessity and pseudo selfemployed. collective arrangements The underlying influence of the breach in psychological contract

Transcription

1 TILBURG UNIVERSITY & TNO Necessity and pseudo selfemployed and the need for collective arrangements The underlying influence of the breach in psychological contract N.C.H. de Bruijn Nienke de Bruijn U Supervisor: R. Dekker Second supervisor: C. Freese February Necessity-driven and Pseudo self-employment

2 Abstract This study examines if different groups of self-employed have different needs for collective arrangements, and to what extent this is mediated by a breach in psychological contract. The group of self-employed is heterogeneous, which can be sub-divided into necessity-driven, pseudo and the other self-employed. Hypothesized is that necessity-driven and pseudo self-employed may have more overlap with the needs and wants of the employee. Since the organization does not provide such accompanied benefits for self-employed, a breach in psychological contract arises. In turn, this could result in a higher need for collective arrangements. A collective arrangement can be the need for social security, additional old-age benefits, education and training or collective employment conditions. The research consists of two studies. The first study was a secondary data analysis, including 3747 self-employed. The data for the second study has been collected among self-employed working within the Netherlands based on the network of TNO and associations of selfemployed, including 646 self-employed. Within study 1, differences are seen between necessity-driven and pseudo self-employed based on individual and work characteristics, using chi-square tests. Within study 2, necessity-driven self-employment had a positive significant effect on the need for collective arrangements. No prove was found for the mediation of breach in psychological contract, between the different type of self-employed and the need for collective arrangements. Keywords: self-employment, necessity-driven self-employment, pseudo selfemployment, breach in psychological contract, need for collective arrangements. 1

3 Introduction Master Thesis Self-employment In October of 2016 there were more than one million self-employed working within the Netherlands. This is an increase of self-employed in comparison to 2003 ( CBS Statline, 2016). The self-employed are a heterogeneous group, in which different groups have their own individual and work characteristics (Josten, Vlasblom & Vrooman, 2014). Already, in 2010 the Dutch government was concerned about the growing number of selfemployed (Social Economic Council, 2010). The underlying reason for this concern, is that despite the growing number of selfemployed, the position of the self-employed stays insecure (Social Economic Council, 2010). Even after several new (legal) regulations by the Dutch government, the position of the selfemployed is still unclear. This creates not only for the self-employed insecurity, but also for the organizations hiring them. The organizations hiring self-employed experience insecurity too and respond by hiring less contractors, resulting in an even more insecure and difficult position for the self-employed (Spaniks, 2017). To understand the difference among the increasing population of self-employed better, they can be subdivided into several categories. The largest group of self-employed deliberately (and voluntarily) chose to become self-employed. Another subcategory mentioned within the Netherlands are the involuntary self-employed, who share an undeliberate decision of becoming self-employed (Dirven, van der Torre, & van den Bossche, in press). The group of involuntary self-employed can be divided into two categories: necessitydriven and pseudo self-employed. The necessity-driven self-employed started their selfemployment based on negative incentives, as for example is seen within funeral industry. Due to the little amount of jobs based on employment, morticians start as self-employed, as only possibility to work within this industry ("NOS besteedt aandacht aan de opkomst van de ZZP'er in de uitvaartbranche", 2017). The second group characterizes themselves by their disputable legal position, which states self-employment, but the actual facts imply employment (Rijksoverheid, 2015). This is seen within the construction industry, construction companies fire their employees and rehire them as self-employed, the direct supervision and direction remains. The legal status of employment disappears, except the characteristics of an employment remain (Rijksoverheid, 2015; "Opmars schijnzelfstandige in de bouw", 2017). When working as a self-employed, the risks of entrepreneurship are your own. Hardly any governmental, prearranged collective facilities exist other than the national. From different trade unions and governmental organizations, plans for collective arrangements for the self-employed are proposed. The collective arrangements focus on social security, 2

4 education and training and employment conditions. When entering into self-employment a risk analysis is presumably made by the individual (Verheul, Wennekers, Audretsch, & Thurik, 2002). Within the risk analysis the additional cost and benefits associated with the profession (later referred to as occupational costs) will be calculated and collected for making a proper decision. Loss in social security is an important aspect in calculating the occupational costs whether to start as a self-employed, or not. For the group of self-employed who are driven into self-employment out of necessity, the risk-profile is shaped out of the necessity to fulfill the need to earn a living. When self-employment is more born out of necessity, the selfemployed worker might be more likely to regard the company that commissioned the work as a defunct employer. This could result in the expectation of the self-employed to have similar employment conditions as the employees have. The (mismatched) expectations of the selfemployed towards the company that commissioned the work can be analyzed in the context of the psychological contract theory as a breach of contract (Freese & Schalk, 2008). The breach in psychological contract occurs when the self-employed feels that certain needs are not fulfilled by the contractor. In the perspective of the employer/contractor, the self-employed are a flexible layer to the organization, outsiders with weak ties to the organization (Rousseau, 1995). For the self-employed this typically results in less additional employment conditions provided by the employer/contractor, such as opportunities for education. From the perspective of the other self-employed, this will probably be included within their decision, and will be taken care of on their own. From the necessity-driven or pseudo self-employed the choice to have the short term perspective with the organization might not be completely based on free will, perhaps the preference will be a long term solid relationship with the organization. The organization may not fulfill the additional expectations of the self-employed for wanting a long term relationship with the organization, such as education, training and better employment conditions. This results in a possible breach in psychological contract and a possible higher need for collective arrangements in social security, education and training and employment conditions. The above combined leads in the following research question and research model, as can be seen in figure 1: To what extent do necessity-driven and pseudo self-employed have a higher need for collective arrangements due to a breach in psychological contract compared to the other selfemployed? 3

5 Figure 1: Research model Theory Different types of solo self-employment Within the labor market several different types of workers can be distinguished, such as employees, entrepreneurs and self-employed. All known for their own characteristics, needs and wants. Over the past years the clear line between entrepreneurship and employment faded (Social Economic Council, 2010), the mid-phase of self-employment is more and more visible within the labor market. Self-employment can be seen as a separate phase between entrepreneur and employee. Within this phase they have to act like a firm with all the administrative and legal consequences, nevertheless their firms resources are their own competencies (van den Born, 2009). A lot of insecurities and ambiguities are combined with self-employment as well, it is a constant compromise between their needs and obligations as an employee, but also as an entrepreneur (Barley & Kunda, 2004). The self-employed are characterized by their high levels of independence and autonomy to the work they perform (Arum & Müller, 2009). The self-employed include workers of all industries, all ages and all educational backgrounds (Arum & Müller, 2009). The self-employed within the labor market are heterogeneous (Josten, Vlasblom & Vrooman, 2014). When paying more attention to several individual and work characteristics of this heterogeneous group, various differentiations can be distinguished. For this research we focus on voluntary and involuntary self-employed. To begin with the involuntary self-employed, the group of self-employed who is not selfemployed completely based on free will or deliberate choices. Nevertheless, within this group, two groups of involuntary self-employed can be identified: based on the status on the labor market and on the type of employment (Dirven et al., in press), belonging to one group, does not exclude the other. 4

6 The self-employed, driven on negative incentives are called necessity-driven selfemployed (van Stel & de Vries, 2015), based on negative conditions within the labor market the individual decides to become self-employed. An example of such negative conditions is not being able to find a job as an employee. Relying on the fact that an income has to be earned, a necessity push into self-employment can be perceived by the individual. Selfemployment can be seen as a way to effectuate a transition from inactivity to employment (Muffels, 2013; Tapia & Mariá, 2008; Hershey et al., 2016). Besides necessity-driven self-employed, a second group can be identified: the pseudo self-employed. Pseudo self-employment occurs when the contract states there is independent labor, whereas the actual facts suggest there is an employment relationship (Rijksoverheid, 2015). Possible characteristics for pseudo self-employment are only working for one contractor or not being able to determine their own working processes. Nevertheless, the characteristics implying pseudo self-employment differ within the literature, including both financial factors and levels of autonomy (Zandvliedt et al., 2013). Besides those groups, a large heterogeneous group can be identified, as visually presented in Figure 2, referred to as the other self-employed. This group includes the selfemployed, not belonging to either of the two types of involuntary self-employed. This group is characterized by their more deliberate and voluntary choice of becoming self-employed, driven on the opportunity of self-employment (Muffels, 2013). Figure 2: A visualization of the overlap of the different types of self-employed, not on scale. Expected is that the involuntary self-employed is feeling more a preference for the employee side, in where the other self-employed is feeling more a preference for the entrepreneur side. Between the two types of involuntary self-employed the preference for the employee side, is in all likelihood based on other incentives. The necessity-driven self- 5

7 employed started working as a self-employed based on the need for earning an income, in where the pseudo self-employed is working as an employee, besides the legal basis. For the necessity-driven the chance is higher that they feel a preference for employment, combined with all the benefits. The pseudo self-employed are working within an environment surrounded by employees, this may result in a favour for employment. It is more likely that the self-employed copy the behaviour and the needs from the employees he is surrounded by. Based on all these differences, all the types of self-employed will feel different about quality of work environment, security and satisfaction (Dirven et al., in press). In earlier research, several comparisons between groups of workers are made implying differences, between employee and self-employed (Hyytinen & Ruuskanen, 2007; Dekker & Köster, 2011; Zandvliet et al., 2013; Cueto & Pruneda, 2017) or between necessity-driven to opportunity-driven self-employed (Dirven et al., in press). First, the quality of work environment of the self-employed, characterized by their perceived health and report of sickness. Self-employed report less absence than employees, because the costs of an additional hour of absence are higher than those of employees. Usually, not because their health is better than those of employees, but the self-employed cannot replace themselves and it will negatively affect their earnings (Hyytinen & Ruuskanen, 2007). When comparing the other self-employed to the necessity-driven and pseudo selfemployed, expected is that the two types involuntary self-employed may report less general health, together with less absence. Because the likelihood that the necessity-driven and pseudo self-employed have not taken into account the additional costs of sickness, due to the preference for employment. The less general health will result in higher levels of severe exhaustion at work (Hyytinen & Ruuskanen, 2007). The second factor is associated with the job/assignment security of the self-employed. On average, self-employment is associated with less security (Rayton & Yalabik, 2014). Necessity-driven self-employed are more afraid of bankruptcy and worry about the future of their business, than others are (Dirven et al., in press). Necessity-driven self-employed may experience less security in comparison to the pseudo self-employed, since pseudo selfemployed most often work for one steady contractor over time (Rijksoverheid, 2015). The last factor is identified as satisfaction. Many studies show that self-employed are more satisfied with their work in comparison to employees (Cueto & Pruneda, 2017). Autonomy and task variety, characteristics associated with self-employment, result in higher job satisfaction (Cueto & Pruneda, 2017; Lange, 2012). Nevertheless, the satisfaction will be less for necessity-driven self-employed and pseudo self-employed in comparison to the other 6

8 self-employed, due to their possible preference for employment (Cueto & Pruneda, 2017; Dirven et al., in press). When comparing pseudo self-employed and necessity-driven self-employed to the average population of self-employed, the other self-employed, differences are expected on quality of work environment, security and satisfaction. This results in the following hypothesis: Hypothesis 1: Necessity-driven self-employed and pseudo self-employed will differ from the average of the population of self-employed with respect to the following indicators: - Quality of work environment; - Job security; - Job satisfaction. Hypothesis 1a: Necessity-driven self-employed and pseudo self-employed will perceive their work quality to be lower than the average self-employed. Hypothesis 1b: Necessity-driven self-employed will perceive their job security to be lower than the average self-employed, in where the pseudo self-employed will perceive their job security to be higher than the average of the population of self-employed. Hypothesis 1c: Necessity-driven self-employed and pseudo self-employed will perceive their satisfaction to be lower than the average self-employed. Different types self-employment and the need for collective arrangements When individuals make a decision of becoming an entrepreneur or self-employed, an assessment is made based on the potential risks and rewards (Verheul et al., 2002). Risk plays an important factor within the decision of becoming self-employed. The expected income of entrepreneurs may be high, however the risk of failure is high too. Besides that, selfemployment implies the loss of certain social security entitlements. Individuals make a (non) deliberate choice, to become self-employed, employed or unemployed, the utility of each choice is made based on personal preferences regarding financial and non-pecuniary risks and rewards (Verheul et al., 2002). The choice results in an individual risk-profile suggesting a possible preference for entrepreneurship or employment, based on personal preferences and characteristics. The loss of social security implies a raise in possible costs associated with self-employment. Social security loss is one of the most important factors in deciding whether 7

9 to become self-employed or not (Brouwer, Hessels, van Stel, & Wennekers, 2005). This loss in social security is most likely taken into account by the other self-employed, the assessment within the risk profile includes the losses. Though, in the case of necessity-driven self-employment, a less obvious and clear choice is made. This group of individuals are more driven into self-employment based on negative push factors. Moreover, in specific cases the necessity-driven self-employed would have chosen employment instead, the loss of certain social benefits is not a deliberate choice, it is a side effect of the need to provide for an income. This may result in a possible higher need for social arrangements, due to the larger preference into employment. A similar association will be in place for pseudo self-employed. Within the work environment, the work of the pseudo self-employment is most likely similar to employees. Due to their surroundings, they may perceive their situations the same as of the employee, the losses within the risk profile of a self-employed are not taken into account. The larger identification with the riskprofile of the employee, will result that the pseudo self-employed, has an even larger need for collective arrangements, with comparable levels to those collective arrangements of employees, than necessity-driven self-employed. Hypothesis 2a: Necessity-driven self-employed and pseudo self-employed have a higher need for collective arrangements then the other self-employed. Hypothesis 2b: Pseudo self-employed will have a higher need for collective arrangements than necessity-driven self-employed. The mediating effect of the breach in psychological contract between different types of self-employment and the need for collective arrangements When working as a self-employed the employment conditions and secondary benefits which are self-evident for employees are not by default, such as career development or subsidiary old-age benefits (Freese & Schalk, 2008). Besides the employment agreement, the employee and employer have a set of unwritten beliefs and feelings about their relationship. Within the literature, this is referred to as the psychological contract (Rousseau, 1989). It consists of the combined perceptions of both parties. When those terms and conditions are not met, a breach in psychological contract will occur. A breach in psychological contract can result in different negative feelings for the contractor or the employee, for example higher levels of job insecurity or lower levels of engagement (Rayton & Yalabik, 2014). 8

10 Within the theory of Rousseau (1995) a clear difference in agreements between employee and self-employed are distinguished, separated on the length of the relationship and the level of embeddedness within the organization. When taking a closer look to Figure 3, employees can be identified as the long term insider. They have dedicated long-term relationships to the company. A high degree of internalization can be seen, accompanied with high levels of cultural assimilation and organization specific knowledge. The self-employed can be identified as the short term outsider. The self-employed can be described by the levels of flexibility and weak ties with the organization, performing activities subservient to the core activities of the organization (Rousseau, 1995). When comparing the short term outsiders (self-employed) to the long term insiders (employees), differences can be found in the level of attachment to the organization. According to Rousseau (1995) organizations offer their employees long term career opportunities, possibility for training and steady jobs, the selfemployed has the opposite. Based on the steady job and possibilities makes that the employee has a steadier attachment to the organization, in comparison to self-employed. Figure 3: The individual-organizational attachment map. Considering the theory of Rousseau (1995) organizations may place the self-employed in the lower left box (self-employed), where the self-employed may see themselves more within the upper right box (core). This difference in perception may result for employers and self-employed in different beliefs and feelings in the psychological contract and is mostly likely to arise on the aspects of job content, career development, social atmosphere, organizational policies and rewards (Freese, 2007). Differences in beliefs and feelings will lead to a breach in the psychological contract between the self-employed and the employer. When a breach in psychological contract is perceived by the self-employed, their levels of dissatisfaction and insecurity will grow (Gakovic & Tetrick, 2003; Maslach, Schaufeli & Leiter, 2001). When the self-employed perceive themselves as the core employees, it is most 9

11 likely that they want the same arrangements as the employees in order to reduce the insecurities and dissatisfaction of the psychological contract breach. The arrangements for employees (core) such as job and organization characteristics and rewards for employees are often arranged in collective agreements by the employer, the branch, or the government. For example, the career development with regard to training is mostly organized by the employed or by specific arrangements by the sector, the rewards are often arranged by a collective labor agreement and the social security schemes are made in place by the government. The basis of those collective arrangements, are not in place for the self-employed, and the need for those collective arrangements may differ per type of selfemployed (A more detailed clarification of the different types of collective arrangements can be found in Appendix A). As parts of psychological contracts in organizations are most likely organized in collective arrangements, the need for collective arrangements will increase among the self-employed when a breach in psychological contract arises. Translating this relationship to the context of the different types of self-employed, differences may be expected between the other self-employed, the necessity-driven selfemployed and the pseudo self-employed. To begin with the other self-employed, the other self-employed is expected as the self-employed who made the deliberate and voluntary choice, based on positive motivations to start as self-employed. Most likely, the loss in certain employee benefits are taken into account, they are overshadowed by the new gained advantages (Verheul et al., 2012). Within here, the other self-employed expects nothing from the contractor with regard to the collective topics, a breach in psychological contract is not likely to occur and so on, not resulting in a higher need for collective arrangements. For the two types of involuntary self-employed, a breach in the psychological contract is most likely to occur. When self-employment is more born out of necessity, the selfemployed worker may have a larger preference for employment, including perceiving the company that commissioned the work more as an employer. For the self-employed, the company will not provide such benefits, which may result in a gap between what is perceived as wanted by the self-employed and what is actually provided by the company, contributing in experiencing a breach of psychological contract (Rayton & Yalabik, 2014), leading to a higher need for collective arrangements. The pseudo self-employed, mostly performs similar jobs as employees, only the legal basis is different (Rijksoverheid, 2015), the pseudo self-employed is even more likely to see the contractor as a defunct employer. Most often, the pseudo self-employed is surrounded by employees performing the same type of work. Among others, a psychological contract is 10

12 shaped by the benefits received by the employees around them. As the pseudo self-employed has the status of the short term outsider in perspective of the employer, it will not receive such benefits. This may result in the fact that the pseudo self-employed will aim even more for the secondary benefits and labor conditions of an employee, resulting in a higher need for collective arrangements. Hypothesis 3a: Necessity-driven self-employed and pseudo self-employed will experience a larger breach in psychological contract than the other self-employed. Hypothesis 3b: Pseudo self-employed will experience a larger breach in psychological contract than necessity-driven self-employed. Hypothesis 4: The positive association between necessity-driven self-employed and pseudo self-employed and the need for collective arrangements, will be strengthened due to the mediation of breach in psychological contract. Methods This quantitative research was a part of the master s program Human Resource Studies at Tilburg University in cooperation with the department of Sustainable Productivity and Employability at research institute TNO. The research consisted of two studies. Study 1 was focused on exploring the different types of self-employment in more depth, study 2 focused on the types of self-employment and their need for collective arrangements. Study 1 Research design, procedure and sample For the examination of hypothesis one, a quantitative research design was used. Study 1 consisted of a secondary data analysis based on the data collected by Janssen et al. (2015) (Later referred to as ZEA). The initial data collection was done by the TNO and CBS (Janssen et al., 2015). This was done digitally and self-employed were approached. Since 2011, the ZEA questionnaire was used for cross-sectional analyses of selfemployment within the Netherlands, every two years. Within the ZEA the perception of the self-employed on employment conditions, safety, health and their tasks were asked. The ZEA data displayed a representative sample for the self-employed within the Netherlands (Janssen et al., 2015). Study 1 was used in an explanatory setting for the operationalization of pseudo self-employment and to determine the differences between groups of self-employed based on 11

13 the representative sample of the ZEA. A selection of the questions asked within the ZEA was used within this research. The complete sample of the ZEA consisted of self-employed (Table 1). 64.4% of the self-employed were men, and the average age was Most of the self-employed within the sample were working within in the commercial service, 48.4%. 44.3% had a higher education (applied university or university). 7.3% of the self-employed perceived their financial status as very good. Measurements Three different measures were used for the measurement of Study 1, based on questions selected from the ZEA dataset (Janssen et al., 2015). Start incentive Self-employment The measurement used for necessity-driven self-employment was copied from the research done by TNO (Dirven et al., in press). Based on a question about the start incentives of the self-employed, a sum score was created. The question asked about the situation before the self-employed started their business. To define whether the self-employed was more negative or positive, the answers were divided into categories: positive start incentives and 12

14 negative start incentives, accordingly with the measure of TNO. A factor- and reliability analysis were done, the results are presented in Appendix G. For the identification of a positive start incentive, the scores of five answers were summed (α =.52). The answers were: I was looking for a new challenge, I always wanted to work as self-employed, I wanted to improve my work-family balance, I wanted to determine myself when and how I worked, and I did not want to work for a boss anymore. The sum score for negative start incentive was created based on three answers: I was not able to find a suitable job as an employee, I am fired, and my employer wanted me to start working as a self-employed. Afterwards, the sum score of the negative start incentive was deducted from the positive start incentive (α =.20). The negative results were indicated as negative start incentives. Based on those results a dichotomous variable was created for necessity-driven self-employed. Pseudo self-employment Within social research a distinction was made based on individual job and financial characteristics to define pseudo self-employment (Zandvliedt et al., 2013). Zandvliedt et al. (2013) identified a list of four criteria: working less than 15 hours per week as self-employed, having less than three contractors, only working via employment agencies and having low levels of autonomy. Within the criteria a diffuse range of pseudo self-employment was found, the amount of pseudo self-employed differed between 2% and 17% of the population (Zandvliedt et al., 2013). The importance per criteria strongly differed between sectors. For example, within healthcare working less than 15 hours a week was a strong indicator, in construction this was not an influencer. The criteria relevant for all industries were having three or less contractors and low levels of autonomy. The strongest and commonly agreed on indicator for pseudo selfemployment is only having one contractor. This is seen as the lower limit of the range implying the amount of pseudo self-employed (Zandvliedt et al., 2013). The upper limit of the percentage of pseudo self-employment can be determined by meeting two out of the five criteria (Zandvliedt et al., 2013). For the purpose of this research the criteria relevant for all sectors were used to create an overall impression for pseudo self-employment, separate from the industry they were working in. Those were the amount of clients and low autonomy. Based on those criteria, three questions from the ZEA were selected (Janssen et al., 2015). 13

15 For all criteria a dichotomous variable was created. To create the measurement for pseudo self-employment, a sum score of all the criteria was made. Afterwards, when meeting two out of three criteria, the identification for pseudo self-employment was done. Autonomy. If the answer was below 2.5, the scale showed low levels of autonomy based on Janssen et al. (2015). The scale used for autonomy had a Cronbach s α =.68. Autonomy consisted of the following questions: o Are you able determine how you perform your work yourself? o Do you determine the order of your tasks yourself? o Are you able to determine your pace of work yourself? o Do you need to create own solution to complete your tasks? o Are you able to take a day of when you want to? Number of clients. If the answer was 1 client or 2-3 clients, it was seen as a criterion for pseudo self-employment. Turnover from largest client. If the answer was more than 90%, it was used as an identification for pseudo self-employment. Individual and work characteristics The details of the measures used for the individual and work characteristics was found in Appendix B. Statistical analysis To test hypothesis one, IBM SPSS Statistics 24 was used. The dataset has been screened for errors and missing values. Variables were created for the different types of selfemployment, the measures for individual and work characteristics were already made within previous research on the ZEA (Janssen et al., 2015). The first step was used to identify the group of pseudo self-employment, this was done using descriptive statistics and frequencies. To identify whether the groups were different cross tabulations and chi-square tests were used. A significant chi-square test would suggest significant differences among groups. Furthermore, to compare the four different groups to the average of self-employed within the population, chi-square tests and t-tests were used. The individual and work characteristics items which were dichotomous were analyzed with a chi-square test, the continuous variables were analyzed using a t-test. Significant results implied differences to the average. Besides the significance level, also Cohen s d was used because of the large 14

16 sample within the ZEA, a Cohen s d >.20 implied a larger likelihood to happen without chance (Cohen, 1988). Study 2 Research design, procedure and sample For Study 2 a new questionnaire was designed. Study 2 was aimed to get more insight in the differences among the groups of self-employed, defined in Study 1, and their relationship with the need for collective arrangements. Afterwards, the possible mediation of the breach in psychological contract was researched. The data for Study 2 was collected using an online questionnaire program Survalyzer. The questionnaire was only available in Dutch and distributed among members of different associations of self-employed within the Netherlands. The complete questionnaire can be found in Appendix C. Participation in the survey was voluntary and every respondent remained anonymous. This research was done in an explanatory setting to determine the relationship between the variables. The data collection was done via social media, the network of TNO (among others monitorarbeid.tno.nl) and a list of associations representing the self-employed (Appendix D). The associations were contacted using a letter and an announcement note for social media accounts were made (Appendix E). Both texts argued the purpose of the research, a time indication for filling in the questionnaire and contact details for possible questions. The questionnaire started with an introduction with similar information to the letters and announcement notes. The sample consisted of 464 self-employed, as shown in Table % of the selfemployed were women, and the average age was Most of the self-employed were working within the healthcare, 53.8%, and work on average 37.7 hours per week. 59.9% had a higher education (applied university or university) and 17.2% perceived their financial status as very good. 72.1% is living together with a partner (both with and without children). 15

17 Differences were found in sample of Study 2 in comparison to the sample of Study 1 (Table 1). Within Study % of the sample worked within healthcare, for Study 1 this was 25.2%. Furthermore, the sample of Study 1 consisted of 64.4% male, the sample of Study 2 consisted of 33.9% male. The educational level of the sample of Study 1 was higher, opposed to the educational level of the sample of Study 2. The last differentiation was found in the financial status, within the sample of Study 2 the financial status was perceived as better in comparison to the sample of Study 1. For both age and working hours the percentages and averages show almost similar results. Measurements Start incentive and pseudo self-employment was coded similarly as Study 1. For more information about those measurements, I refer to the methods of Study 1. A reliability and factor analysis were done to test whether the scales were reliable and valid. For the factor analysis the KaiserMeyer-Olkin measure (KMO) was checked, the KMO >.6 defined an appropriate factor analysis. The number of factors were chosen based on the Eigenvalue > 1.0. Additionally, the measures were checked for reliability with Cronbach s α >

18 Breach in psychological contract Master Thesis Self-employment The questions of the breach in psychological contract were based on The Tilburg Psychological Contract Questionnaire (Freese, Schalk, & Croon, 2008). The concept of breach in psychological contract consisted of six statements. The general question used was: Consider how your most important client held to its promises. To what extent do you agree with the following statements? I feel... The statements were: Satisfied, frustrated, happy, betrayed, appreciated, disappointed. The respondent answered within a range of 1 = Totally disagree to 5 = Completely agree. Afterwards, the statements of Satisfied, Happy and Appreciated were recoded into the other direction, to create the scale for the breach in psychological contract which showed, the higher the score the more breach in psychological contract. A reliability analysis was done (α=0.85), which showed that the construct for breach in psychological contract was a reliable construct. An average scale was created of the summarized items. Need for collective arrangements Based on the research by Dekker and the research by de Beer (Dekker, 2010; De Beer, 2017) a measure for the need for collective arrangements was created. The questions focused on four aspects of collective arrangements: social security, pension, training and education and employment conditions. For every type of collective arrangement a set of statements was designed in which the respondent could agree or totally disagree on the statements. When formulating the statements four levels of possible perspective were used, to determine the level of need for collective arrangements. Firstly, the individual, secondly the principal, thirdly the sector and lastly the government. In Appendix F, an overview of the perspectives and corresponding statements is shown. For every topic, a general question was asked. Afterwards an average of the scales was created. This was done for all collective arrangements combined and per subtype of collective arrangement. The factor analysis showed 4 factors. The KMO was.89 (p<.001), the reliability including all items was α=0.87 (Appendix G). Based on the results of the factor analyses, the first factor consisted of variables of the need for social security, additional pension and education from principal to governmental perspective. Factor 2 included an additional governmental perspective for social security and pension, both were deleted from the measure, potentially measuring whether the self-employed had a higher need for minimum social arrangements, instead of the additional collective arrangements. 17

19 Factor 3 combined all questions regarding the employment conditions of the selfemployed. Based on this, the employment conditions was included as a separate collective arrangement. This may imply that self-employed have enough own influence on their hourly rate or perceive this as a separate arrangement. Factor 4 consisted all the questions about the individual perspective. The variables questioning the individual perspective represented the lower level for the scale for the need for collective arrangements. When the statements were answered completely agreed, it represented that the self-employed did not want any level of influence within their collective arrangements. When this perspective was removed from the measure the individual perspective was not included within the answers. At the end four different measures were created. For all measures described below, the Cronbach s alpha when item deleted would have increased when the individual perspective was removed. Firstly, the complete measure for the need for collective arrangements was made, including social security, pension and education. The need for collective arrangements was a reliable scale, with a Cronbach s alpha of For every type of need for collective arrangement a separate measure was made. Firstly, the scale for social security and pension was created. Combined the Cronbach s alpha was.82. Next, the reliability analysis and factor analysis for the need for collective training and education was conducted, the factor analysis resulted in one component (KMO=.723) this scale was reliable (α=0.76). The scale for collective employment conditions resulted in a reliable scale (α=0.80) and the factor analysis showed one component (KMO=.732). Control variables Since there is no research done within the association of type of self-employment on the need for collective arrangements, the control variables were based on research within corresponding subjects of social insurances. The perceived financial position of the self-employed was included, a more stable financial position, results in a bigger chance of having a disability insurance (Conen et al., 2016; Hershey et al., 2016). This might imply that less stable financial position may have a higher need for collective arrangements, since they were not able to provide this for themselves. Furthermore, age may be an important influencer. The older the self-employed gets, the higher the possibility for social risks (Conen et al., 2016; Hershey et al., 2016), this may increase their need for collective arrangements. Furthermore, when the self-employed 18

20 has to take care of a family a higher need for collective arrangements is more likely, prevention of a loss in income will be crucial to support their family (Conen et al., 2016; Hershey et al., 2016). Therefore, there was controlled for being breadwinner and the composition of the household. In addition, we included controls for gender, satisfaction, health, industry, length of self-employment, hours per week and education. Statistical Analysis To test hypotheses two to four, IBM SPSS Statistics 24 was used. The dataset has been screened for errors or missing values. For the creation of starting incentive and pseudo self-employment the steps of Study 1 were repeated. Furthermore, for study 2 the summarized measures for the breach in psychological contract and collective arrangement were created. For hypotheses two and three the groups of self-employed had to be compared and the strengths of the effects had to be compared. This was done using a multiple linear regression. All models were checked for multi-collinearity, when VIF 5.00 there is absence of multicollinearity. An absence for multi-collinearity existed, except for the control variable composition of household. This was most likely caused by dummies consisting of a too small group (O Brien, 2007). Groups were combined, this resulted in all VIF s being lower than For the regression a dummy variable of the different types of self-employed had to be coded. The group of other self-employed was used as reference category. First, the effects of pseudo and necessity-driven self-employment were compared to the other self-employed for the effect on the different types of collective arrangements, afterwards this comparison was done solely for the difference between necessity-driven and pseudo self-employed. For testing hypothesis 2a the group of other self-employed was used as reference category within the regression model. The necessity-driven, pseudo self-employed and the group meeting both criteria were added as independent variable and the type of collective arrangement as dependent variable. For testing hypothesis 2b the independent variable was pseudo selfemployment, necessity-driven self-employment was used as a reference category. As dependent variable the different types of collective arrangements were included. The steps of hypothesis two were repeated for hypothesis three, only with breach in psychological as dependent variable. The last hypothesis, was tested with the use of Process Macro (Hayes, 2013), in combination with the coding for multi-categorical independent variables, specifying the 19

21 dummy coding for the Process Macro (Hayes & Preacher, 2014). Within the process macro model 4 (specified in Appendix H) was used. Results Study 1 Operationalization of Pseudo self-employment In earlier research, between 2% and 17% of the self-employed population was pseudo self-employed (Zandvliedt et al., 2013). This is a wide range, the exact number of pseudo selfemployed strongly differed depending on the type of criteria were used for defining pseudo self-employment. For this research a range between 28% and 0.8% was found. The width ranges for the exact number of pseudo self-employed were also found in this research and strongly differed between the different criteria. The lower level result was found when using the criteria only having one contractor and having low levels of autonomy, the upper bound was found using having less than three contractors, 90% of the profit from one contractor or having low levels of autonomy. Pseudo self-employed meeting two out of three criteria of the upper bound consisted of 8.8% of the sample, including the group who also identifies with necessity-driven self-employment. For this research the two out of three criteria was used. The percentage of 8.8 percent was within the range of pseudo self-employment and will give an average estimation of the pseudo self-employment within the Netherlands. Pseudo self-employment and necessity-driven self-employment The chi-square test showed that 9.4% of both groups included the same self-employed, as can be seen in Figure 4. Furthermore, a non-significant comparison between the two types of involuntary self-employed, the necessity-driven and pseudo self-employed was found (χ 2 =.160, p=.689). 20

22 Figure 4: A visualization of the overlap between pseudo and necessity-driven self-employment, not on scale. Individual and work characteristics of necessity-driven and pseudo self-employment Individual characteristics: Demographic profile The largest group of self-employed belonged to the group who were neither pseudo self-employed or necessity-driven self-employed (Table 3). Around 7.6% of the selfemployed were identified as pseudo self-employed, approximately 16.8% was identified as necessity-driven self-employed, 1.8% identified with both groups. The groups differed significantly in age, education and sector in comparison to the average self-employed. The necessity-driven self-employed more often had a higher education (53.4%, p<.001), more often worked within business services (31.3%, p<.001) and started significantly more often working as self-employed from unemployment (29.9%, p<.001) or being disabled (2.5, p<.001). For pseudo self-employment the only significant difference was found in their situation before starting as self-employed. Pseudo self-employed were in significantly less situations unemployed, before started working as pseudo self-employed (4.1%, p<0.01). 21

23 Work characteristics: quality of work environment Master Thesis Self-employment Necessity-driven self-employed experienced significantly more signs of psychological exhaustion at work (9.1%, p<.05; Table 4). Furthermore, reported the necessity-driven selfemployed less general health (21.1%, p<.001). Pseudo self-employed experienced a significant higher workload (2.28, p<.05) and more psychological exhaustion at work (10.5%, p<.05), compared to the average within the sample. On individual absenteeism rate no significant differences were found. Work characteristics: Security The necessity-driven self-employed marked more often a high risk on bankruptcy (6.8%, p<.01; Table 5), they worried more about their future (16.34%, p<.001) and were significantly less satisfied with their labor security (37.3%, p<.001), than the average of the sample. Pseudo self-employed were significantly more satisfied with their labor security (13.1%, p<.001), but did not differ in their perceived risk on bankruptcy (3.7%, p>.05) and their worry about the future (9.3%, p>.05). Work characteristics: Satisfaction Necessity-driven self-employed were more often unsatisfied with their work (10.3%, p<.001) and did experience a significantly lower work inspiration (5.84, p<.01), than the average of the population of self-employed. Furthermore, they thought more often about working as an employee within the last year than average (42.9%, p<.001) and, significantly saw themselves within five years not working as self-employed anymore (18.7%, p<.01). 22

24 Pseudo self-employed experienced a significantly lower work engagement (5.76, p<.01). Furthermore, they thought less than average about working as an employee (17.5%, p<.01). Nevertheless, they did not want to work as self-employed anymore within five years, significantly more than average (19.8%, p<.05). The results showed that hypothesis one was partly confirmed. Necessity-driven and pseudo self-employed did differ from the average self-employed on signs of burnout, partly assuming a lower work quality. Furthermore, Necessity-driven self-employed did perceive their security as less. At last, the necessity-driven self-employed was less satisfied than the average self-employed. Study 2 Descriptives and correlations Table 7 showed the results for the descriptive and correlation analysis for the variables necessity-driven self-employment, pseudo self-employment, other self-employed, breach in psychological contract and all types of collective arrangements. First the means will be discussed thereafter the correlations. The mean score for necessity-driven self-employment was 0.067, more self-employed were not necessity-driven self-employed. Furthermore, more self-employed were pseudo selfemployed (M=0.120). Nevertheless the group of other self-employed was predominant for both. The scale for need for collective arrangements was numeric, 5 implying a high need for collective arrangements. The mean scores for the overall score, social security and training and education all leaning towards not needing collective arrangements, but were only slightly below average. The need for collective employment conditions showed a higher mean (M=2.52), a little above average for needing collective employment condition. Necessity-driven self-employment correlated, significant negatively with pseudo selfemployment (r=-.10, p<.05) and the other (r=-.54, p<.01). Furthermore, pseudo selfemployment (r=-.74, p<.01) was also negatively correlating with the other self-employed. 23