The Independent Contractor Workforce: New Evidence on Its Size and Composition and Ways to Improve Its Measurement in Household Surveys
The Independent Contractor Workforce: New Evidence on Its Size and Composition and Ways to Improve Its Measurement in Household Surveys (DOI: https://doi.org/10.17848/wp23-380) was written by Katharine G. Abraham, Brad J. Hershbein, Susan N. Houseman, and Beth C. Truesdale in 2023. It was published in the Upjohn Institute working papers series.
Classification of workers as independent contractors has a political dimension, because they are afforded lesser protections, entitlements, and welfare.
Large household surveys like CPS do not capture independent contractors because they are not employed by a company or corporation for filing purposes. The Contingent Worker Supplement (CWS) is intended to mitigate this gap.
The authors argue that this supplement undercounts independent contractors.
Administrative tax data captures self reported independent contractor wages, but it is generally accepted that this data underreports.
Authors estimate underreporting with a Contract Work Module, incorprated into a nightly telephone omnibus survey.
- Trialed survey interviews with 6 in person focus groups..
- Gallup implemented
- 4 waves in 2018, 2019; collected 60,000 respondents
The key finding is that 9% to 11% of those who initially report to be employed by an organization also report, with directed questions, to be independent contractors. Estimates on independent contractors, without this miscoded population, match the CWS. Implication is that CWS features miscoded population.
Miscoding incidence is higher among lower education and racial minorities. "We argue that the high levels of miscoding we observe likely reflect not only confusion among workers about their employment status, but also question wording in household surveys that implicitly assumes that individuals who are working for an organization are hired as employees rather than working on a contract basis."
Also found higher incidence of reporting secondary work as compared to CWS.
People consider themselves to be working for the client(s) regardless of the legal status and formality of employment contracts. Quoting George in the paper, "I don’t want to take the time to try to explain, okay, technically I don’t work for the [newspaper name]".