New Survey of Alternative Workers

Every year the Bureau of Labor Statistics plumbs Current Population Survey data to estimate the number of self-employed American workers, and every year for many years that number has been declining. In 2015, only 6.4 percent of workers aged 16 or older were self-employed, down from 7.4 percent a decade earlier. Now two economists are calling that number—and the downward trend—into question. That's just one of the eyebrow-raising findings in a new survey of alternative work arrangements.

Apparently economists have been frustrated with the lack of an update for the Bureau of Labor Statistics' Contingent Worker Survey (CWS), last fielded in 2005. (Here is the Federal Reserve Bank of Boston's attempt to update the numbers earlier this year.) That's because so much has happened in the 10-plus years since the BLS last asked Americans about "gig" work, or what the BLS calls alternative work arrangements. So economists Lawrence F. Katz and Alan B. Krueger decided to do something about it. They fielded a version of the CWS as part of the RAND American Life Panel in 2015. Their goal was to determine the number of Americans aged 18 or older whose main job was independent contractor or freelancer (the self-employed), contract worker, on-call worker, or temporary help agency worker.

They found the motherlode—millions of workers and a rapidly growing workforce that may account for most of the nation's labor force growth over the decade. Fully 15.8 percent of workers in 2015 had an alternative work arrangement, up from 10.7 percent in 2005. The number of alternative workers grew from 15.0 million to 23.6 million during those years—a 57 percent increase. A comparison of alternative and traditional work force growth shows alternative workers increasing by 8.6 million between 2005 and 2015 and traditional workers increasing by just 0.5 million. Wow.

Which brings us back to that 6.4 percent (and falling) self-employment rate in Current Population Survey data. Katz and Krueger find a significantly larger 8.4 percent self-employment rate. IRS data backs up their claim of growing rather than shrinking numbers of self-employed. "Understanding the reasons underlying the divergent trends between the IRS and CPS data on self-employment should be a priority for future research," state the authors.

Much more information about alternative workers in 2015 is available in the NBER working paper, The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015, Working Paper 22667 ($5)