Independent work: choice, necessity, and the gig economy


Official statistics and private surveys point to recent momentum in the growth



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Official statistics and private surveys point to recent momentum in the growth 
of independent work
There are indicators that independent work is already on the rise, although due to data 
problems within government statistics, there is no clear time series to document a growth 
trend in various types of independent work. 
In the United States, BLS data show flat growth in self-employed individuals, but other 
sources indicate that there has, in fact, been an increase over the past two decades. Katz 
and Krueger, drawing on government data sources, found that Schedule C filings to the 
Internal Revenue Service indicate that self-employment, measured as a share of total 
employment, has grown from 10 percent in the 1980s to more than 16 percent now.
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Furthermore, they conclude that alternative working arrangements (including independent 
contractors, on-call workers, temporary help agency workers, and workers provided by 
contract firms) accounted for virtually all net job growth in the United States between 2005 
and 2015. Over this period, they find that the share of the workforce in these arrangements 
expanded from 10 percent to 15 percent (Exhibit 22).
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In the EU-15, both traditional jobs and temporary work remain slightly below their 2008 
peaks. Self-employment rates remained roughly constant in the EU-15 from 2008 to 2014. 
But there is country-level variation: the United Kingdom, France, and the Netherlands 
posted growth in self-employment, while Italy, Greece, Portugal, and Spain recorded sharp 
declines.
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 A recent study from the European Parliament confirms that self-employment is 
flat but finds that marginal part-time work is increasing, and much of it is involuntary in Italy, 
Greece, Portugal, and Spain.
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  The self-employed use Schedule C to report income or losses from their businesses. See Internal Revenue 
Service, Statistics of Income, publication 1304, Table 1.3, available at www.irs.gov/uac/SOI-Tax-Stats-
Individual-Income-Tax-Returns-Publication-1304-%28Complete-Report%29.
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  Lawrence Katz and Alan Krueger, 
The rise and nature of alternative work arrangements in the United States, 
1995–2015
, March 2016.
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  David Blanchflower, 
Flexibility@work 2015: Self-employment across countries in the Great Recession of 
2008–2014
, Dartmouth College and Randstad, May 2015. See also “The self-employment boom: Key issues 
for the 2015 Parliament,” UK Parliament website, available at www.parliament.uk/business/publications/
research/key-issues-parliament-2015/work/self-employment/; this article documents a trend of clear recent 
growth in UK self-employment numbers, which reached 4.5 million in 2014. 
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Precarious employment in Europe, Part 1: Patterns, trends, and policy strategy
, European Parliament, 
July 2016.
MGI’s survey results and occupational analysis 
suggest that there is significant room for growth in 
the independent workforce.


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McKinsey Global Institute
3. How independent work may evolve in the future

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