ZEW Press Release: Self-employment Increasingly Important Among University Graduates

The number of self-employed academics is often underestimated. And yet, the self-employment rate among foremen, technicians and university graduates in Germany is far higher than among employees with an apprenticeship and persons without any vocational qualifications. While in 1995, an average of ten out of 100 employees of the total active population was self-employed, the ratio among foremen was 22, and 16 among academics. These are the findings of a study carried out by the Centre for European Economic Research (ZEW) in Mannheim.

The self-employment rate furthermore varies significantly depending on the individual subject areas and on the regional location. Whereas natural scientists - for instance, physicists, chemists, and biologists - and engineers - for instance, mechanical and electrical engineers - rarely end up self-employed, an above-average number of doctors, pharmacists, psychologists, architects, artists and lawyers are self-employed.

On an average, the share of self-employed individuals among business people and economists is relatively high. Between 1991 and 1995, the self-employment rate among university graduates in the old federal states has increased by 1.7 per cent. Within the same period, the increase of self-employed individuals is even more pronounced in the new federal states with a rise of 6.1 per cent. In particular physicists, biologists, psychologists and electrical engineers have increasingly decided in favour of self-employment. One reason for this was the increasing unemployment rate among graduates from these subject areas. In other subject areas, the increase observed between 1993 and 1995 has again shown a downward trend, for instance among computer scientists, mathematicians, architects and chemists.

Self-employment rates among university graduates according to subject area and regional location (in percentage terms)

Region	West German States			East German States
Subject Areas	1991	1993	1995	1991	1993	1995
Architecture	37.9	44.1	38.7	16.9	33.4	35.1
Engineering	9.3	10.5	10.3	6.2	9.1	12.9
Natural Sciences	6.4	8.4	9.2	2.4	5.8	7.5
Business Administration	13.6	14.8	16.1	6.1	11.0	9.1
Law	28.7	27.7	29.2	14.6	27.9	31.6
Economics	13.6	10.2	16.3	4.6	10.3	12.0
Medicine	43.1	43.7	45.9	28.3	44.3	43.6
Pharmacy	37.6	41.2	39.5	13.2	9.8	31.6
Psychology	26.5	29.2	33.9	4.0	7.6	5.0
Arts / Music / Other	22.4	24.8	28.0	8.1	14.7	18.5
Total	14.2	14.8	15.9	7.4	12.3	13.5