There has been quite a bit of debate about the significance of the growing ranks of self-employed workers since the start of the recession in 2008. New research aims to shed light on this, and what it claims to reveal is surprising.

There is a view that the self-employed are always better off financially than those who are employed. Yet it seems that many self-employed workers have fared far worse during the last few years than those in full-time employment.

Have people been turning to self-employment because of a shift in enterprise culture or is the reality more mundane? Remember, 400,000 people have become self-employed since 2008.

New research funded by the respected Joseph Rowntree Foundation reports the earnings of the self-employed have dropped dramatically in the last 12 years. More specifically, those earning £150,000 or more, have done rather well. For everyone earning less than £100,000, incomes have fallen sharply by more than 30%. According to the ONS average earnings have also fallen.

There’s other data too. As a % of GDP, the total earnings of self-employed workers has fallen over the same period from 11% to close to 8% despite more people coming into the sector.

A picture is emerging then that counters the public’s perception of the self-employed. In recent years going the self-employed route hasn’t been a path to riches. Rather, those that have switched to self-employment and make modest earnings have seen a substantial drop in earnings, in real terms.

Against a backdrop of falling average earnings, it’s not too far-fetched to reach the same conclusion as other observers. That many individuals have turned to self-employment as a means to avoid unemployment. It’s likely then that a proportion of the much debated 400,000 are jobless, taking any work they can find.  Seen in this way, self-employment isn’t always a career move.

However this latest research also shows that if you treat self-employment in a serious and committed way, you’re more likely to be able to maintain your lifestyle.