Independent work: choice, necessity, and the gig economy

Exhibit A8
Regression analysis of satisfaction
SOURCE: McKinsey Global Institute analysis 
a p<0.01.
b p<0.05.
c p<0.1.
Weighted mean overall satisfaction
Simple
With control variables
(1)
(2)
(Intercept)
4.577
a
4.569
a
(0.023)
(0.033)
Worker: 
Free agent
0.285
a
0.299
a
(0.051)
(0.050)
Worker: 
Casual earner
0.017
0.018
(0.048)
(0.048)
Worker: 
Traditional by necessity -0.276
a
-0.274
a
(0.048)
(0.048)
Worker: 
Reluctant
-0.299
a
-0.218
a
(0.071)
(0.071)
Worker: 
Financially strapped
-0.210
a
-0.148
b
(0.070)
(0.070)
Age: 
<24
0.055
(0.047)
Age: 
55+
0.112
a
(0.040)
Income: 
Low
-0.322
a
(0.045)
Income: 
High
0.190
a
(0.037)
Income: 
Unknown
0.068
(0.072)
Country: 
Spain
-0.193
a
(0.060)
Country: 
Germany
-0.090
c
(0.047)
Country: 
United Kingdom
-0.044
(0.052)
Country: 
France
-0.062
(0.052)
Country: 
Sweden
-0.016
(0.125)
Worker
baseline
Traditional by choice
Traditional by choice
Age 
baseline
25–54
Income 
baseline
Average
Country 
baseline
United States
Observations
5,445
5,445
Adjusted R
2
0.019
0.043
Residual standard error
283.141 (df = 5439)
279.633 (df = 5429)

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McKinsey Global Institute
Appendix: Technical notes 
4. ESTIMATING THE GROWTH POTENTIAL OF THE INDEPENDENT 
WORKFORCE BASED ON ASPIRATIONS STATED IN SURVEY RESPONSES
Building on our estimate of the current size of the independent workforce and the 
classification of independent workers into four specific quadrants, we conducted a 
more detailed follow-up analysis of people’s desired sources of income to see how the 
independent workforce might develop in the future. The basic premise is that future 
growth will be driven by the desire of traditional workers and people not currently working 
to become independent, although that will be offset by the desire of some independent 
workers to exit the independent workforce. In this section, we look at the relative magnitude 
of both of these forces and estimate their net effect.
While this analysis is closely related to the choice vs. necessity classification described 
above, this analysis considers all working-age respondents rather than just workers. We 
also take into account the fact that a person could be independent by choice but still want 
to change the role independent work plays in their livelihood (e.g., they may want to turn 
a supplemental earning activity into their primary living or vice versa). Even a person who 
performs supplemental work out of necessity (that is, they would prefer traditional work as 
their secondary source of income) could still want to remain in the independent workforce 
and become a free agent. Similar to the previous analysis, however, we will only consider 
people’s preferences as they relate to providing labor.
To capture all the different ways someone’s current working situation can differ from 
their aspirations, we built an exhaustive transition matrix for four specific groups: primary 
independent workers, supplemental independent workers, traditional workers, and 
people not currently working. The current state of each respondent follows the definitions 
described in the previous section. Their desired future state is based on their answers to 
“What is your primary/secondary desired source of income?” Throughout the analysis, 
we interpret the answers “working as a freelancer,” “working in my own business,” and 
“working as a temporary employee” as a desire to be independent. We interpret “working 
as a permanent employee” as a desire to be traditional. Any other response (which, for most 
people, was “retirement”) was taken as a desire to not work at all. We considered primary 
independent workers who reported that they were already following their desire as wanting 
to be independent regardless of the answer they chose. For consistency, we did the same in 
the case of traditional workers: as long as they responded they were already pursuing their 
desired primary source of income, we assumed their desire is to stay traditional. 
We then applied the following logic:
 
ƒ
A person has a desire to be a primary independent worker if their response to “What is 
your primary desired source of income?” was a form of independent work. Their desired 
secondary source of income is irrelevant since they would still be primary independent 
workers even if they added more independent income on the side.
 
ƒ
A person has a desire to be a supplemental independent worker if they do not want to be 
a primary independent worker, and their response to “What is your secondary desired 
source of income?” was a form of independent work.
 
ƒ
For everyone who did not fall into the previous two groups, we looked at whether they 
expressed a desire to do traditional work as either their primary or secondary source 
of income. Based on that criterion, we divided the group into people with a desire to be 
traditional and those who want to stop working altogether. 
While this approach was fully exhaustive, it introduced a risk of overestimating how many 
people would transition into another type of work since what people want is often very 
different from what they actually do. To provide a more realistic estimate of the future size 

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McKinsey Global Institute
Independent work: Choice, necessity, and the gig economy
of the independent workforce, we asked respondents follow-up questions about how likely 
they were to pursue their preferred options. They could choose an answer on a 7-point scale 
ranging from “definitely will not” to “already doing.” We then repeated the logic described 
above, considering two groups of responses: “very likely to pursue” and above, as well 
as “somewhat likely” and above. These two groups of responses became the basis of a 
range of estimates for future growth, with the more exclusive group forming the low (more 
conservative) end of the range and the “somewhat likely” and above group forming the high 
end of the range. Finally, some respondents answered that they were less than somewhat 
likely to pursue both their primary and secondary desires. We excluded those responses 
from our analysis in order to keep our estimates conservative. They became part of the 
“other” category along with traditional workers and people not currently working.