Free space is the reserved space to be held free when the 
cluster is initially loaded or when a mass insert
is done. The purpose is to allow data records to be 
inserted or expanded in length when updated. The
FREESPACE parameter applies only to the data component of 
KSDS. You can specify the amount of CI
and CA free space when you define the data set using the 
IDCAMS DEFINE command. You can change
the amount of free space using the IDCAMS ALTER command. 
Free space is specified as a percentage.
For a CI, VSAM takes the specified percentage times the 
actual CI size rounded down to a full byte.
VSAM does not care about the record length. The CA 
percentage specifies the amount of CIs to be held
per CA. The number of empty CIs per CA is the number of CIs 
per CA times the CA percentage. The
track required for the sequence set is not included in the 
calculation of CIs per CA, and the calculated
figure is rounded down to the next integer. If the figure 
is less than one, it is the same as specifying 100%
for the CA percent value. If you specify 100 (the maximum 
value) for both the CI and CA percentage,
each control interval will contain one record and each 
control area will contain
one used control interval. If the FREESPACE amount is 
altered after the data set is initially loaded, and
sequential insert processing is used, the allocation of 
free space is not honored. The syntax of the
FREESPACE parameter is
  FREESPACE (CI-percent CA-percent) 

Hope this helps you