Recently, in the wake of the economic recession, self-employed individuals in South Korea have struggled with decreases in sales, increases in debt, and other difficulties in their businesses, which have left a growing number of them to opt to shut down. As a result, some are voicing their concerns that this may rock the basis of the working class’s economy. This weakened competitiveness of self-employed individuals can be attributed to not only cyclical factors but also fiercer competition among an excessive number of start-ups in the sectors of wholesale, retail, restaurants, and accommodations, which are closely related to the daily living of the public. Meanwhile, some argue that the government is also responsible, to a certain degree, for the oversupply in self-employment, as it has mainly focused its policies for self-employed individuals on supporting start-ups to solve the unemployment issue. Therefore, it is important to accurately analyze the level of self-employment in South Korea and assess the impact of governmental spending on the degree of self-employment.

To this end, this report compared self-employed individuals and non-wage workers, i.e. self-employed individuals and their unpaid family workers, in South Korea to those in other OECD countries, while also reflecting the gaps in socio-economic conditions, in order to evaluate the level of self-employment in South Korea. The percentage of self-employed individuals was calculated by utilizing the International Comparison Index. The assessment found that Korea ranked 2nd among 26 OECD countries, with an average of 170.98 points in the proportion of self-employed individuals between 1990 and 2013, and 2nd among 32 OECD countries, with an average of 190.58 points in the proportion of non-wage workers during the same period. Therefore, even considering the gaps in socio-economic conditions, the proportion of self-employed people in South Korea is relatively higher than that of other OECD countries.

In addition, according to the empirical analysis on the linkage between governmental financial funding and the percentage of self-employed individuals, the market modernization program and the market management reform program turned out to have contributed to the increase in the proportion of self-employed workers.

The government has recently taken a turn in its policy directions to strengthen lifecycle-based tailored services for self-employed individuals. Nonetheless, inadequacies still exist in the supporting scheme to alleviate competition among self-employed people in the entrance and exit phases and to enhance their competitiveness in the growth phase, thus requiring measures for improvement.