NEW-ENGLAND JOB CHANGES DURING THE RECESSION - THE ROLE OF SELF-EMPLOYMENT

During the recent recession in New England, the number of unincorporat ed self-employed individuals grew while all the other major clases of workers shrank. A shift into self-employment represents one part of a set of changes in the mix of workers and jobs that reflects the nature of the region's downturn and the economic adjustments it entailed. Th is article examines patterns of job and income change for different cl asses of workers in New England from the pre-recession peak year of 19 88 to the recession-low year of 1992, with an emphasis on the role of the self-employed. Income data suggest that the self-employed fared be tter than the unemployed during the recession, but their earnings decl ined more, on average, than the earnings of individuals still working for other employers in 1992. Thus, self-employment apparently represen ted a successful stopgap measure, for some, to keep earning after the loss of a wage and salary job, but typically at a lower level. A key q uestion is the degree to which these adjustments will be reversed as t he New England economy recovers.