To many people, 'Self-Employed' evokes the image of a risk-taker setting up a business with the intent of making it grow and prosper. The distinction between self-employed and sub-employed is the existence of an innovative business concept or idea. Self-employment is attempting to develop something new, sub-employment is survival. It's a short time endeavour to obtain a survivable income level before moving to employment. Many are self-employed because they do not have the possibility of being wage employees, they are reluctantly self-employed and only do so until they can find something better. In this sense, they are not self-employed, they are sub-employed. They do not willingly leave waged employment to create their own enterprises, they become self-employed because they are without work and have no other choice. Many are simply performing as subcontractors, doing the same activities for their former employers as they did when they were employees. These individuals typically still think of themselves as employees in all but a technical sense; in many cases, they are. Sub-employment is caused by people losing regular jobs and not being able to re-enter the employed workforce in a depressed economy.
Unemployed people typically respond to the lack of adequate employment opportunities by attempting to create their own employment. Most do this out of desperation: the only alternative to working and earning very little is to be unemployed and earning nothing.
Moving from unemployment to sub-employment carries a heavy financial risk. All self-employed citizens are treated like second-class citizens in the social welfare system, genuine entrepreneurs and sub-employees alike. Sub-employees have no automatic access to the meager protections offered by social welfare should their oft times desperate move from unemployment to sub-employment fail. It's the worst kind of poverty trap where the desperately unemployed are penalized for even attempting to rise above their circumstances. For government it's a win/win situation. The failed sub-employee is no longer an unemployment statistic thus providing a misleading reduction in unemployment figures. Nor is the sub-employee, except in the most poverty-stricken circumstances, entitled to a social welfare payment.
It should be of no surprise that the worst performing economies with the highest unemployment rates in the Eurozone are also those with the highest rates of self-employment. Greece, Italy, Romania, Portugal, Spain and Ireland top the list with self-employment rates in multiples of Luxembourgs low of 8%. Depending on self-employment to re-float ailing economies has created the Pig Paradox where the rates of self-employment more usually indicate higher unemployment not entrepreneurial recovery.