The examples of developed and transitional economies show that the level of self-employment is a rather contradictory economic indicator. It is consequence of just the definition of self-employment (the wide spread of labor force participants can be included in this status: prosperous entrepreneurs and destitute workers despaired to find a satisfactory regular job as an employee get into there together). Therefore the high level of self-employment can be the indicator of liberalization of economy and successful institutional reforms and on the contrary can reflect institutional problems, imperfection of contracts and excess of employees’ labor supply. The market reforms in Russia pulls-in the most talented persons inclined to risks and managed to save certain financial capital or find a way for arbitrage, in the category of the employers and pushes-out some others in own-account status. But some of the last chose status of own-account workers as a necessary step on the way to employers. These are confirmed by empirical analysis of the Russia Longitudinal Monitoring Survey (RLMS) data sets for 1994–2002 years in the present paper. The research adds the peculiarities to the known generalized socio-economic portrait of self-employed and considers the changes which occurred due to the crisis of 1998. The earnings functions such as a Mincer type equation both logit models were used in the research.