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Self-employment plunges: USA Today
Number of entrepreneurs down 3.1% in June as they sought stability, benefits with established firms.
July 18, 2005: 10:28 AM EDT

NEW YORK (CNN/Money) - Self-employment plunged last month as entrepreneurs sought steadier income and benefits with established companies, a newspaper report said Monday.

The number of self-employed workers fell 3.1 percent or 303,000 in June from the previous month, USA Today said, citing Labor Department statistics.

June marks the second-consecutive month of big self-employment declines and the third-biggest drop since 1995, the newspaper said.

"More people are finally being reabsorbed into full-time jobs," Maria Minniti, associate economics professor at Babson College, told the newspaper. According to the report, self-employment tends to fall as the economy grows.

But, the paper said, other economists caution it might be too soon to declare a permanent shift in self-employment.

"This is a bouncing number," David Levine, a professor at the University of California Berkeley, told the newspaper.

A study published last month also found that the number of adults involved in entrepreneurship fell 20 percent last year from 2003, said the newspaper. But the study's author, Paul Reynolds, said the decline is not worrisome unless there is another 20 percent drop this year.

The soaring cost of health-insurance was cited as the main reason start-ups struggle, and has been deemed the number one problem facing small companies in surveys by the National Federation of Independent Business, USA Today said.  Top of page

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