Groundbreaking research from the Upjohn Institute found that independent contractors make up around 15 percent of the workforce, about twice as much as previous estimates.
Susan Houseman, Upjohn’s vice president and director of research, presents the research Friday, Jan. 5 at the Allied Social Science Associations’ annual meeting in San Antonio, Texas.
Upjohn researchers Houseman, Brad Hershbein and Beth Truesdale, and Katharine Abraham of the University of Maryland wrote the paper, “The Independent Contractor Workforce: New Evidence on Its Size and Composition and Ways to Improve Its Measurement in Household Surveys,” available as an Upjohn Institute working paper and policy brief.
The researchers held focus groups with independent contractors to see how the workers think and speak about their work and how they would respond to surveys asking about work arrangements. Language was key, as respondents interpreted terms to describe work in different ways. Some associated “gig work” primarily with musicians’ performances, for example, and interpreted terms like “moonlighting” as applying to others but not themselves.
After holding the focus groups, the researchers used the insights gained to write a new series of questions for the Gallup polling organization’s Education Consumer Pulse survey.
The results were dramatic. Around one in 10 workers who had told the survey they worked for an employer — and would thus normally be coded as an employee — were actually an independent contractor on at least one of their jobs.
Young workers, less-educated workers, workers of color, multiple-job holders, and those with low hours were most likely to be miscoded this way.
This miscoding can have huge policy implications. Independent contractors aren’t covered by laws meant to protect employees and don’t receive benefits such as workers’ compensation and unemployment insurance.
If policymakers believe that only a few workers lack these protections, they might be less likely to address the workers’ concerns. Correctly classifying miscoded workers the researchers identified in this study brought the share who are independent contractors up to 15 percent, a sizable constituency, with many of these additions coming from economically disadvantaged groups.
Houseman presents the paper at 8 a.m., Central Time, Friday, Jan. 5 at the ASSA 2024 annual meeting. See a full listing of Upjohn staff participation at the conference.
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