Working Paper: NBER ID: w30327
Authors: Annette Bernhardt; Christopher Campos; Allen Prohofsky; Aparna Ramesh; Jesse Rothstein
Abstract: We use de-identified data from California personal income tax returns to measure the frequency and nature of independent contracting and self-employment work in California. We identify this work by the presence of a Schedule C on the tax return and/or the receipt of a Form 1099 information return. We estimate that 14.4% of California workers aged 18-64 in tax year 2016 had some independent contracting or self-employment income; about half of these workers also had earnings from traditional W-2 jobs during the year. We find that only a small share (1.4%) of workers had earnings from online labor platforms (often called gig work). Workers with low earnings were significantly more likely to earn independent contracting or self-employment income and to rely primarily or exclusively on that income. We explore the characteristics of workers engaging in independent contracting and self-employment and their distribution across family type, geography, and industry.
Keywords: Independent contracting; Self-employment; Gig work; California tax data
JEL Codes: J24; J4; J46
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic environment (P42) | prevalence of independent contracting and self-employment (J23) |
| lower earnings (J31) | income from independent contracting or self-employment (H24) |
| demographic factors (J11) | participation in independent contracting (M55) |
| growth of independent contracting (M55) | implications for labor regulation (J88) |