Independent work: choice, necessity, and the gig economy


Working-age adults by primary form of employment, 2015



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Independent-Work-Choice-necessity-and-the-gig-economy-Full-report

Working-age adults by primary form of employment, 2015
1
% working-age population 15+; million


29
McKinsey Global Institute
Independent work: Choice, necessity, and the gig economy
Box 2. Data difficulties in measuring independent work 
Independent work may not be a new phenomenon, but it has never found a comfortable 
fit within the labor market categories tracked by government agencies or multilateral 
institutions such as the ILO. Current data collection on this important segment of the 
workforce is insufficient, outdated, and too narrow to capture the full range of economic 
activity that is taking place. Improving the available statistics would give policy makers a 
better window into how their labor markets are evolving.
Governments in the United States and Europe conduct extensive labor force surveys but 
ask people only about their primary employment. In the European Union, both temporary 
work and self-employment have been tracked for the past 20 years along with data on 
inactivity and reasons for inactivity, part-time employment and reasons for being part time, 
and motivations behind temporary work.
The United States tracks self-employment, part-time employment, and contingent work. 
But self-employment has been tracked in its current form only since 2000, and it was 
previously narrowly defined as only unincorporated self-employment (that is, workers who 
are self-employed but have not formed a corporate legal entity). Additionally, the US Bureau 
of Labor Statistics has not conducted its Contingent Work Supplement, its primary source 
of information about non-payroll jobs, since 2005. In 2015, however, economists Lawrence 
Katz and Alan Krueger repeated the Contingent Work Supplement, yielding updated 
estimates of the share of the US workforce engaged in what they call “alternative work 
arrangements.”
1
 This term includes some temporary work and self-employment, although 
it has been broadened to include on-call workers, contracted-out workers, independent 
contractors, and temporary help agency workers (a definition that differs from the one used 
in this report). They found that the share of the US workforce engaged in these types of work 
arrangements grew from 10 percent in 2005 to almost 16 percent in 2015. The BLS is now 
planning to run the Supplement next year.
It is difficult to make cross-country comparisons since governments use distinct terminology 
regarding employment arrangements, forcing researchers to make assumptions if they seek 
to compare data sets. For instance, the United States counts independent contractors, 
temporary agency or contract workers, on-call workers, and freelancers as “contingent 
workers,” a category that overlaps with self-employment. However, the European Union 
distinguishes between self-employed persons and broadly defined temporary workers (any 
employee whose contract has a defined end date). In this report, we have attempted to 
reconcile these differences to make the data comparable.
Finally, official statistics do not capture the full range of independent activity that now takes 
place. In particular, government sources do not capture independent work that is done on 
a supplemental basis—and as the MGI survey shows, more than half of all independent 
earners engage in this way. Official surveys also fail to track whether independent work is 
undertaken by choice or out of necessity—a critical piece of knowledge for understanding 
whether workers are being “pulled” or “pushed” into independence. 
1
  See Lawrence Katz and Alan Krueger, 
The rise and nature of alternative work arrangements in the United 
States, 1995–2015
, March 2016.


30
McKinsey Global Institute
1. Sizing the independent workforce 

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