Home-based self-employment: combining personal, household and employment influences

Summary

Despite the significant economic, innovative and social contributions of home-based self-employment, it is an under-researched and under-theorised area. We address this gap by drawing from established entrepreneurial theory to propose and validate a more complete theoretical model that combines personal, household and employment influences. We validate our proposed model by drawing on quantitative data from a large-scale, longitudinal, UK-based, social studies dataset. Our validated model demonstrates how and why antecedent and current household and employment factors, but not personal factors, associated with being home-based interact and provide constitutive affordances that result in a setting for self-employment that is unique in more fundamental ways than simply the home location of the business. Despite being responsible for some of the world’s most innovative and successful businesses, home-based businesses are often denigrated as lacking ambition or growth potential. The results of our analysis vindicate the choices of the home-based self-employed, by demonstrating that basing a business in the home is a rational choice based on an intersection of household and employment characteristics. The data used in this study predates the COVID-19 pandemic. However, it is expected that home-based self-employment will grow significantly following the pandemic in response to increasing acceptance of home-working. It therefore behoves entrepreneurship scholars to have a robust understanding of this previously overlooked type of self-employment if we are to be able to provide guidance to policymakers and self-employment support services.