Independent work: choice, necessity, and the gig economy

APPENDIX:  
TECHNICAL NOTES

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McKinsey Global Institute
Appendix: Technical notes 
handmade and other goods or renting out spare assets (such as rooms, apartments, 
vacation homes, or cars) to others in the “sharing economy.” 
We recognize that few activities can be categorized as completely independent or, 
conversely, purely traditional. An employee in a long-term contract with flexible hours can 
have more autonomy than a small business owner who runs the neighborhood grocery 
store and keeps  fixed hours. Small business owners with one or two employees might 
be independent, but their work lives start losing some of the traits of independence as 
their business scales up. 
While our conceptual definition does not enforce a clear boundary between independent 
and traditional work, we did have to impose a cut-off in order to provide a sizing estimate. 
See the section below on the MGI survey methodology for further details.
 
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Independent worker.
 We consider someone to be an independent worker as 
long as some portion of their reported income over the past 12 months came from 
independent activities, whether providing labor, selling goods, or leasing assets. A 
single independent job in the past 12 months is sufficient for a worker to be part of the 
independent workforce.
 
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Traditional worker. 
Conversely, a traditional worker is someone whose entire income 
was derived from a traditional employer-employee relationship. This includes full-time 
workers, part-time workers, and those with more than one part-time traditional job. Our 
estimates of traditional workers are not directly comparable to government employment 
numbers because we classify anyone earning income from small side jobs as an 
“independent worker.”
 
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Primary independent worker.
 This includes all respondents who earn more than 
50 percent of their reported income from independent activities. We exclude several 
groups in the population who may earn some income from independent work but who 
have another primary activity. These groups include students, retirees, homemakers and 
other caregivers, the disabled, and the unemployed. We consider independent workers 
belonging to these groups to be supplementary independent workers by definition. The 
numbers of primary independent workers in the population are roughly comparable 
with government estimates of the independent workforce, which usually look solely at 
respondents’ primary source of income.
 
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Supplemental independent worker.
 We consider independent workers to be 
supplemental earners if they derive 50 percent or less of their total earned income 
from independent activities, or if they are students, retirees, homemakers and other 
caregivers, the disabled, and the unemployed. Some supplemental independent 
workers may actually think of themselves as traditional workers because their primary 
jobs are traditional, and they would often be reported as such in official statistics.
 
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Europe.
 Throughout this report when we refer to Europe, we are referring to the EU-15, 
which includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, 
Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom.