Key findings:
- The majority of America’s IW started self-employment by choice, seeking a combination of flexibility and extra earnings.
- A smaller segment uses time in the IW as a safety net, participating in the IW to stay financially afloat between traditional jobs.
- The IW earns a higher premium as compared to the traditional workforce, earning 15% more per hour.
- Sites connecting the IW with opportunities are additive to the U.S. economy. These sites create a “thicker” labor market that enables the IW to find more clients, especially outside their local area. 96% of transactions through the Upwork marketplace happen between parties more than 50 miles apart, spreading wealth within the U.S. from relatively affluent areas to more typically middle-class areas.
- Technology increases opportunities by reducing search costs. The average time to contract on Upwork is just three days, enabling businesses — especially small businesses and startups — to access specialized skills quickly when project needs arise.
- As many as 20 million members of the American IW say that they have found clients online.
Author’s summary:
“Policymakers should focus their efforts on enhancing the value and benefits of the IW without hurting the flexibility these workers seek or making the IW too expensive for firms to use relative to other options (including the option of not hiring anyone at all and, as a result, passing up an efficient use of labor inputs). The diversity and wide reach of the IW, as demonstrated by this and other studies, imply that “one-size-fits-all” policy reforms may have unintended consequences, even if they are proposed with the best of intentions.”
