In this case study, the situation of self-employed persons without employees (SEWE) in the Netherlands is described with regard to their labour market and socio-economic position and access to social protection. Also, differences in the Dutch tax regime between SEWE and salaried workers and the pros and cons of SEWE for the economy are explored. In the Netherlands, different from the situation in many other countries, self-employed workers without employees are seen as entrepreneurs rather than as employees. According to Eurostat the proportion of SEWE has risen from 12 percent of total employment in 2006 to 13.8 percent in 2016. Most SEWE are active in professional and technical activities, health care and construction. Compared to other workers, SEWE are more often men, highly educated and older. SEWE in the Netherlands generally enter into self-employment for reasons such as seeking greater autonomy and working time flexibility rather than 'negative' motives such as unemployment or having no alternative. Only a small proportion (estimated between 3 to 15 percent) can be considered dependent or 'necessity-driven' SEWE. On average, SEWE earn less than workers in regular paid employment (€33,600 versus €36,000). However, on the household level SEWE tend to combine different sources of income. Also, SEWE households are on average wealthier than salaried-employed-households. The percentage of SEWE that experience income difficulties is similar to that among regular workers in paid employment. In some regards, SEWE enjoy the same social protection as salaried workers. This applies to health care, long-term care and family benefits. In other areas, SEWE are only partially covered. The maternity benefits for SEWE for instance only go up to minimum wage. Also, SEWE only receive the state pension and are not covered for the risk of sickness and invalidity. However, 26 percent of SEWE don't make additional pension arrangements and 73 percent don't have sickness insurance, mainly because they cannot afford it. This puts them at risk of a loss of income in case of sickness or retirement. Finally, SEWE are not insured for the risk of unemployment, for which no voluntary insurance exists. The Dutch tax regime contains several considerable tax deductions and exemptions for SEWE, which make self-employment financially attractive compared to salaried employment. For instance, a hypothetical starting SEWE making a profit of €21,709 may end up paying zero income tax in 2017. The rise in SEWE may result in a more resilient, flexible economy and may provide important labour market prospects for more vulnerable persons in the labour market. However, there has not been a simultaneous growth in labour productivity and innovation levels within firms. This poses serious questions to the fiscal stimulation of SEWE in the Netherlands.
