WSJ – How Estimates of the Gig Economy Went Wrong

  • Alan Krueger of Princeton University and Lawrence Katz of Harvard, experts on ‘gig economy’ say their estimates of its impact were too high
  • in 2015 survey they overestimated how people using jobs, especially via apps like Uber, would upend traditional work arrangements
    • Krueger and Katz now explain how the thesis itself was flawed
  • many researchers and journalists fretted that the gig economy was taking over the way people work
  •  Labor Department finally studied the question in detailed research released last summer, they concluded the gig economy had scarcely changed the U.S. labor market.
  •  the gig economy appeared swollen largely because the labor market earlier this decade was so weak for so long in the aftermath of the recession
    • As economy returned to normal, they returned to more familiar work 
  • surveys used to measure alternative work arrangements remain riddled with flaws, and the Labor Department does a poor job of accounting for people with multiple jobs
    •  were hard to spot because there was so little quality data about the gig economy’s size
    • Krueger and Katz with their 2015 survey found a significant jump in the share of workers who were in alternative work arrangements, as much as 5 percentage points
      • now conclude there was a modest rise in the share of the workforce in nontraditional jobs over the last decade—on the order of one to 2 percentage points, instead of the five percentage point
  • Comparisons between 2005 and 2015 had a hard time accounting for the difference in economic health
    • created a fertile environment for people to experiment with gig work
    • didn’t represent a permanent shift

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