January 11, 2019
In 2016, researchers Alan Krueger of Princeton University and Lawrence Katz of Harvard charted the ascent of the “gig economy,” i.e. the proliferation of short-term jobs performed by independent contractors. The explosive popularity of Uber was viewed as a case in point for the argument that the traditional employment relationship was headed for the exits.
Three years later, Krueger and Katz say they overestimated the growth of the gig economy. “We conclude that there likely has been a modest upward trend in the share of the U.S. workforce in alternative work arrangements during the 2000s,” they write in a newly-published paper.
That’s a step back from the 2016 study, which concluded that 15.8% of the workforce was engaged in “alternative work arrangements,” ranging from self-employment to temp agencies. In 2005, when the Bureau of Labor Statistics studied this sector, it represented 10.7% of the workforce.
Subsequent to Krueger and Katz’s 2016 report, Congress appropriated money for a new BLS study in 2018. With a larger population sample than Krueger and Katz had available for their 2016 study, the BLS update found that the alternative workforce had actually declined over the years to 10.1%.
The newly-published findings from Krueger and Katz point to growth, but on a smaller scale than the 2016 paper suggested. They conclude that the gig economy has grown by one or two percentage points since 2005, rather than five.
However, whether the truth is a 60-basis-point decline or a gain of 100 to 200 bps since 2005, a U.S. employment sector in the low double digits is still a sizable population. Defining the size of that population is a tall order, though, because there isn’t much agreement on what “alternative work arrangements” actually mean.
Yet, even if the 2016 study’s predictions of accelerated growth in the gig economy haven’t come to pass, the sector bears watching closely. In a recent study titled “The Rise of the Gig Economy: Fact or Fiction?” that focused on the ride-sharing industry, researchers from the U.S. Census Bureau and the University of Maryland wrote, “Adoption of new technologies often involves long and variable lags. An important objective for economic measurement will be to capture changes in the nature of work as they occur in the years to come.”
For comments, questions or concerns, please contact Paul Bubny