Blog Post

Self-employment, COVID-19, and the future of work for knowledge workers

The experiences of the self-employed could give a glimpse into the future of work for knowledge workers in a post-pandemic world.

By: Date: March 8, 2021 Topic: Innovation & Competition Policy

COVID-19 and the resulting lockdowns and work-from-home orders have forced businesses and employees to rethink existing working modes. Advances in information and communications technologies have allowed many knowledge workers to switch to home-based teleworking overnight, especially in the developed world. In Europe, the percentage of teleworkers increased from 5% in 2019 to 40% in 2020. Although many countries are now vaccinating against COVID-19, the world is unlikely to return to normal quickly. As such, teleworking for many middle- and high-skilled workers will likely persist as part of the future’s hybrid work mode.

In many ways, increased teleworking because of COVID-19 has made the working conditions of knowledge workers (those predominantly working at a computer) similar to those of the self-employed. A better understanding of how the traditional self-employed—business owners with or without other employees—organise their work and harness the benefits of autonomy and flexibility while managing their job demands can offer insights to policymakers, employers and employees on the changing work domain more generally and the labour market consequences of COVID-19 more specifically.

The self-employed have higher job satisfaction levels than salaried employees, even after accounting for differences, such as age, gender, working hours and salary (Figure 1). The self-employed in the European Union are about 4 percentage points more satisfied with their overall working conditions than employees. However, the pattern is not uniform, and in several countries, there is no job satisfaction difference between the two groups.

Of course, the self-employed and salaried workers might differ in their characteristics, such as motivation, ability or entrepreneurial aptitude. But even when these factors are taken into account, switching from a salaried job to self-employment leads to significant short-run gains in job satisfaction (Figure 2), which may persist five years after switching.

Yet, having your own business brings many challenges. The self-employed have non-standard career paths, conflicting job demands, work longer hours and, in the lower parts of the wage distribution, earn less than comparable salaried workers. They also face time pressure, uncertainty, role ambiguity, and loneliness, which can lead to stress.  How do they have this job satisfaction advantage then and what might it imply for teleworkers and the future of work?

Figure 1: Predicted probability of reporting job satisfaction, by self-employment status and country

Figure 2: Job satisfaction consequences of switching from salaried employment to self-employment vs. remaining salaried employed in Germany, 1991-2017

Despite the high job demands, business owners also have high job control and autonomy over their tasks. This independent way of working gives rise to “procedural utility,” ie, the enjoyment of the process as well as the outcome of working while avoiding hierarchy and subordination. This unique combination of high job demands but also high job control gives rise to “active jobs,” a state when work leads to self-actualisation, mastery, new skill development and ultimately greater well-being. In fact, job control completely cushions the stress aspects of self-employment.

Like self-employment, teleworking comes with many challenges and job demands. It may result in longer working hours and increased responsibilities, more distractions, conflicting priorities, and loneliness because of less socialisation with colleagues. The relationships individuals have at work are not only crucial for the flow of information but are also essential for workers’ well-being.

Yet, teleworking also provides freedoms and self-organisation, which may help create “active jobs” for knowledge workers working for an employer. For example, those who work from home can often flexibly decide their working hours or take breaks to accommodate household chores or other obligations. This increased freedom and autonomy, may boost productivity. Also, given that commuting is the least enjoyable part of people’s day, the reduced need to travel to work may increase happiness, which in turn can make workers more productive. Unsurprisingly, salaried workers value working from home. In the United States, they are even willing to take an 8% salary cut in exchange for this opportunity and the flexibility it brings. Like with the self-employed, the autonomy and freedom due to teleworking can outweigh the stress associated with it and ultimately durably shape preferences for teleworking. In Europe, about four in five respondents indicated that they would like to work from home, even after the pandemic is over. While only 13% wanted to telework daily, about a third said they would like to use their home office several times a week. Moreover, the more workers used their “home office,” the more likely they were to prefer to work from home, implying overall positive experiences with teleworking.

Against this backdrop, employers may need to make additional provisions to support teleworkers in a post-pandemic world. First, firms may need to invest in additional ICT resources or training to accommodate their employee’s changing needs. In some European countries, more than half of current teleworkers are in this role for the first time, implying that they may be lacking the necessary equipment or skills required for working from home. Second, employers may have to specify the options and conditions for voluntary teleworking in the future, including the tasks they would like to be done remotely, and the opportunities of coming to the office and socialising with co-workers. Finally, managers may have to tailor their approach to the needs of individual workers, for example, by initiating more direct personal contact via phone or video-chat and monitoring subordinates’ well-being.

Governments can play an important role, too. The continuous supply of childcare services and educational activities can support working parents, especially women, with balancing work and caregiving or home-schooling duties. In some cases, free childcare or additional paid leave for parents when schools or kindergarten are closed may be an option. In addition, policymakers can focus on modifying labour laws to outline the conditions for requesting to telework or hybrid working and ensure equal pay for teleworkers and office workers.

These policies will help harness the benefits of autonomy, flexibility and self-organisation that come with teleworking or hybrid working modes and mitigate the stress, burnout, isolation, or unfair treatment that may accompany working from home.

This blog was produced within the project “Future of Work and Inclusive Growth in Europe“, with the financial support of the Mastercard Center for Inclusive Growth.

Recommended citation:

Nikolova, M. (2021) ‘Self-employment, COVID-19, and the future of work for knowledge workers’ Bruegel Blog, 4 March


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

Read article More on this topic More by this author



The skills of the future

What challenges and opportunities does technology bring to the labour market?

By: The Sound of Economics Topic: Innovation & Competition Policy Date: June 23, 2021
Read article More on this topic More by this author


What to expect from the ECB’s monetary policy strategy review?

Emphasis will be placed on greening monetary policy and clarifying the ECB's price stability objective, but is this enough?

By: Maria Demertzis Topic: European Macroeconomics & Governance Date: June 23, 2021
Read article More on this topic

Blog Post

The socio-economic consequences of COVID-19 in the Middle East and North Africa

Confronted with COVID-19, high-income Gulf countries have done better than most of their middle- and low-income neighbours; Jordan and Morocco are also positive exceptions.

By: Marek Dabrowski and Marta Domínguez-Jiménez Topic: Global Economics & Governance Date: June 14, 2021
Read article Download PDF More on this topic

Policy Contribution

Blending the physical and virtual: a hybrid model for the future of work

The pandemic has shown that many workers can efficiently work remotely, with benefits for wellbeing and even productivity. The European Union should develop a framework to facilitate hybrid work.

By: Monika Grzegorczyk, Mario Mariniello, Laura Nurski and Tom Schraepen Topic: Innovation & Competition Policy Date: June 9, 2021
Read article More on this topic More by this author


Is Bidenomics more than catch-up?

The Biden administration's promises to 'think big' and rebuild the country seem like a major historical departure from decades of policy orthodoxy.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: June 3, 2021
Read about event More on this topic

Past Event

Past Event

Women, Covid-19 & The EU Recovery Plan

How can we ensure that the recovery plan doesn’t leave women behind when 84% of working women in the EU aged 15-64 are employed by services that were predominantly impacted by Covid-19 restrictions?

Speakers: Mary Collins, Maria Demertzis, Alexandra Geese, Jacob Funk Kirkegaard, Dan Mobley, Naomi O'Leary and Emma Rainey Topic: European Macroeconomics & Governance Date: June 2, 2021
Read about event More on this topic

Upcoming Event


Blending physical and virtual: shaping the new workplace

Bruegel Annual Meetings, Day 2 - This panel will cover the changes the COVID-19 pandemic made to our workplaces, and what to expect in the near future.

Speakers: Mario Mariniello, Shamina Singh and Luca Visentini Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author


Europe must fix its fiscal rules

The pandemic has shown that the EU’s spending framework reflects an outdated economic orthodoxy.

By: Maria Demertzis Topic: European Macroeconomics & Governance Date: May 27, 2021
Read about event More on this topic

Past Event

Past Event

The work of the future: How are new jobs created and what are the implications for labour markets?

Join us for a presentation of 'New Frontiers: The Origins and Content of New Work, 1940 — 2018' by David Autor (MIT and NBER) and the findings on the source of 'new work' followed by a discussion with an invited panel of academics and policy makers.

Speakers: David Autor, Maarten Goos, Barbara Kauffmann and Georgios Petropoulos Topic: Innovation & Competition Policy Date: May 25, 2021
Read about event

Past Event

Past Event

The Future of Work – a conversation with Commissioner Schmit

EU Commissioner for Jobs and Social Rights Nicolas Schmit joins Bruegel for a conversation around the future of work.

Speakers: Mario Mariniello and Nicolas Schmit Topic: European Macroeconomics & Governance, Innovation & Competition Policy Date: May 25, 2021
Read article Download PDF More on this topic

Policy Contribution

The great COVID-19 divergence: managing a sustainable and equitable recovery in the European Union

Policymakers must act to prevent lasting divergence within the EU and to prevent scarring from the fallout from the pandemic.

By: Grégory Claeys, Zsolt Darvas, Maria Demertzis and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: May 20, 2021
Read about event More on this topic

Past Event

Past Event

EU recovery funds and good governance

A live podcast with Tomáš Zdechovský MEP.

Speakers: Maria Demertzis and Tomáš Zdechovský Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 20, 2021
Load more posts