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The Promise and Perils of Self-Employment

Mark Marich

While recent booms in entrepreneurship and self-employment have generated many benefits for the American economy, these trends are not necessarily a “free lunch” according to a new article in City Journal, a publication of the Manhattan Institute.

Patterns of self-employment have changed in recent years. In the past, self-employment was counter-cyclical, with more self-employed emerging due to a shortage of other jobs. More recently, pull factors have seemed to predominate, with self-employed workers opting for greater flexibility and better work-life balance. This shift generates many benefits, in terms of new jobs and in terms of more flexible labor markets. But, it also creates many challenges for workers who face higher health care costs, limited access to unemployment benefits, and an overall weaker social safety net. The article’s author, Laura Vanderkam, suggests that both Republicans and Democrats should place closer attention to the needs of this neglected part of the workforce.

Article: Winter 2009 City Journal article, “The Promise and Peril of the Freelance Economy,” by Laura Vanderkam

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