Home-based workers are those who do paid work within their homes or the surrounding grounds. They produce goods for local or global value chains and are of two basic categories.
- Self-employed home-based workers: Assume all the risks of being independent operators. They buy their own raw materials, supplies and equipment, and pay utility and transport costs. They sell their finished goods mainly to local customers but sometimes to international markets. Most do not hire others but may have unpaid family members working with them.
- Sub-contracted home-based workers (called homeworkers): Are contracted by individual entrepreneurs or firms, often through an intermediary. They are usually given the raw materials and paid per piece, but cover many costs of production: workplace, equipment, supplies, utilities, and transport. They typically do not sell the finished goods themselves, and often do not know where or for whom the goods will be sold. In both categories, these workers deal with low incomes, irregular and/or cancelled work orders, unreliable supply of raw materials, delayed payment, and rejected goods. The majority are women. Larger economic trends such as fluctuating demand and rising input prices affect both groups, but particularly the self-employed.