Do We Even Know If The Gig Economy Is Growing?

The concept of the "gig economy" clearly captures something real, but it can be hard to measure defined in the statistical sense that brings joy to my heart. For example, it clearly refers to those who drive for Uber and Lyft. But does it refer more broadly to all workers with "alternative work arrangements," who are hired for a short-term job with no serious expectation that it will become a longer-term employment connection? Does it cover people who obtain jobs through a temp agency and work for a series of employers, for example?

Conventional labor statistics don't draw these kinds of distinctions very clearly, so researchers have looked for clues in less traditional kinds of data. The results are less clear-cut than one might like.

For example, back in 2015 two prominent labor economists, Lawrence Katz and Alan Krueger, noted that the usual tool for the U.S. Bureau of Labor Statistics in looking at alternative and nonstandards work arrangements is called the Contingent Work Survey (CWS). But this survey has only been carried out occasionally, and in fact, had not been done since 2005. So Katz and Krueger tried to carry out a survey in Fall 2015, attaching the questions to a nationally representative survey regularly done by the RAND think-tanks called the American Life Panel.

The results were striking. As I noted at the time, they found:

[T]he percentage of workers engaged in alternative work arrangements – defined as temporary help agency workers, on-call workers, contract company workers, and independent contractors or freelancers – rose from 10.1 percent in February 2005 to 15.8 percent in late 2015. ... We further find that about 0.5 percent of workers indicate that they are working through an online intermediary, such as Uber or Task Rabbit ... Thus, the online gig workforce is relatively small compared to other forms of alternative work arrangements, although it is growing very rapidly  ... A striking implication of these estimates is that all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.

Well, Katz and Krueger have now revisited the subject four years later, and their latest results suggest that the number of workers in alternative jobs actually has not been growing at all. The more recent paper is "Understanding Trends in Alternative Work Arrangements in the United States," published as a working paper from the National Bureau of Economic Research (#25425, January 2019, an ungated version is here).

The Bureau of Labor Statistics did get funding to do a follow-up of the official Contingent Workers Survey in May 2017. They write: "The ... findings were released in June 2018 and indicate, in seeming contrast to our earlier findings ... a slight decline in the incidence in alternative work arrangements from 10.7 percent in 2005 to 10.1 percent in 2017 ..."

What's going on here? Part of the answer seems to be that the labor market was improving from 2015 to 2017, and so more people moved into traditional jobs. Other differences have to do with the extent to which surveys were answered by workers directly, or by others in the family, and whether the 2015 survey for some reason ended up with an oversample of people holding multiple jobs. But bottom line, the current view is that the number of alternative workers may have risen during the Great Recession and its aftermath, but has since declined back to about where it was before the recession.

Anat Bracha and Mary A. Burke provide some additional perspective in "The Ups and Downs of the Gig Economy, 2015–2017," written as a working paper for the Federal Reserve Bank of Boston (#18-12, October 2018).

The particular focus on Bracha and Burke is on data from the Survey of Informal Work Participation (SIWP), which was carried out as part of something called the Survey of Consumer Expectations, which is done on a monthly basis by the Federal Reserve Bank of New York. They added questions about the extent of "paid informal work or side jobs," and whether "websites and/or mobile platforms were used in finding and/or performing such work." The survey was not really intended to include professional freelancers or temp workers, but as with any survey, it's not always obvious how respondents interpret the questions. They find:

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