American workers finding greater flexibility with expanded labor markets powered by growth in connectivity MOUNTAIN VIEW, Calif. - November 30, 2016 - While self-employment has long existed, increasing connectivity is creating new opportunities for the self-employed and their clients to find each other and generate more work opportunities. So says a new study released today by Paul Oyer, Fred H. Merrill Professor of Economics at the Stanford Graduate School of Business. The study, commissioned by Upwork, the world’s largest freelancing website, provides the most in-depth look available at how and why more people are choosing to join the independent workforce (IW) and the resulting impacts. “Independent work expands opportunities for both buyers and sellers of services,” said Professor Oyer, the author of the new study. “Companies, especially smaller businesses, can use independent workers to find specific services that they cannot get through traditional employment. Meanwhile, independent workers find a wider and more lucrative range of work opportunities with a high degree of flexibility.” As demographic shifts impact labor supply and demand, interstate commerce and international trade have grown, and increasing connectivity has made it easier for people to find independent work. This groundbreaking study conducts economic analysis of data found in the annual “Freelancing in America” (FIA) survey to define and profile the growth and diversity of the U.S. independent workforce. It examines the economic drivers, impacts, and facts around the growth of work performed by America’s self-employed professionals. By combining independent workforce survey data from “Freelancing in America” with transaction data from buyers and sellers using Upwork’s website, the study provides new facts and results that are valuable for policymakers and thought leaders studying this growing segment powering the American economy. Here are a selection of the study’s main findings:
- Online labor platforms expand markets. Online platforms make labor markets “thicker,” which creates the potential for better matching of the specific skills a member of the IW offers and the specific skills a client is looking for.
- The IW is growing. The IW has grown by more than half from 2005 to 2015, with an annualized growth rate of approximately 5%.
- Increasing connectivity is enabling IW growth. As many as 20 million of the American IW found clients online in 2015.
- The IW enjoys greater flexibility. 68% of IW respondents to the FIA survey reported that schedule flexibility is a reason they freelance.
- Online labor platforms spread wealth. 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.