Academic journal article Monthly Labor Review

Measuring Labor Market Activity Today: Are the Words Work and Job Too Limiting for Surveys?

Academic journal article Monthly Labor Review

Measuring Labor Market Activity Today: Are the Words Work and Job Too Limiting for Surveys?

Article excerpt

The Current Population Survey (CPS) produces some of the nation's most closely watched labor market statistics, including the national unemployment rate. However, some researchers have recently suggested that the labor force questions used in the CPS do not correctly capture workers in informal employment arrangements, causing an undercount in employment. Although we cannot directly measure how many workers might be missed in the CPS, we use data on income-generating activities from the American Time Use Survey to explore possible misclassification of employment in the CPS.

Tina Brown, journalist and magazine editor, in describing today's economy, said, "No one I know has a job anymore. They've got Gigs."[1] This quote illustrates the current interest among labor economists in people who make their living going from one short-term work opportunity to another.[2] The arrival of the internet and smartphone applications (apps) has facilitated this type of work. For example, people now use their own cars to drive others around, obtaining customers through mobile apps; others move furniture or do household chores after identifying customers through websites. These recent changes in the economy have led to widespread discussion of "gig workers," although no clear consensus currently exists on what constitutes gig work. Most definitions include many self-employed workers, temporary workers, and independent contractors. Many definitions also include people who do gig work as their primary source of income as well as employed people who supplement their earnings with gig work.

Despite anecdotal evidence of a great increase in the number of independent contractors and freelancers, data from the Current Population Survey (CPS), the nation's monthly labor market household survey, show that the percentage of workers who are self-employed has actually trended down over the past two decades.[3] Talk of increasing numbers of people doing gig work in addition to their traditional jobs is countered by the fact that CPS statistics show that the share of the employed who have more than one job has remained relatively constant in recent years.[4] How should we interpret these contradictions?

Some researchers have suggested that the questions used in the CPS--questions that have served as a model for many surveys in the United States and in other countries--are outmoded and no longer relevant for today's economy.[5] They contend that gig workers and people in informal employment arrangements do not think of their assignments as "work" or a "job," causing surveys relying on these words in their questionnaires to undercount employment. Some researchers are also concerned that the CPS and other surveys may fail to capture people who do gig or informal work as a second job.

If it is true that many people no longer think of themselves as working or having jobs, the employment statistics that the CPS and a host of other surveys produce may no longer be accurate, which is worrisome. Although we cannot directly measure how many workers might be missed in the CPS, measures of time spent in income-generating activities from the American Time Use Survey (ATUS) can be used to investigate possible misclassification.[6] ATUS respondents report activities done for a single day in a diary. If gig and informal workers do not consider their tasks work, we expect ATUS to capture these moneymaking activities done "on the side" or under informal arrangement in measures of income-generating activities, measures that are not available from the CPS. The ATUS is one of the many surveys with CPS-style questions to measure employment, but it is unique in that it also has data on income-generating activities.

In this article, we use ATUS data on income-generating activities to explore possible measurement error in classifying labor force status in the CPS. First, we describe how the CPS and ATUS measure employment and multiple jobholding. …

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