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The Size and Characteristics of Informal (“Gig”) Work in Canada

Author

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  • Olena Kostyshyna
  • Corinne Luu

Abstract

Underlying wage growth has fallen short of what would be consistent with an economy operating with little or no slack. While many factors could explain this weakness, the availability of additional labour resources from informal (“gig”) work—not fully captured in standard measures of employment and hours worked—may play a role. We investigate this possibility through the Bank of Canada’s Canadian Survey of Consumer Expectations (CSCE) by documenting the characteristics and size of such working arrangements. We find that just under one-third of Canadians participate in this type of work, and this participation is often consistent with labour market slack. Just over one-third of respondents who take part in informal work do so as a result of weak economic conditions, and over half would switch their hours worked for hours in formal employment with no increase in pay. Part-time workers, youth and people in provinces with historically high unemployment rates were most likely to participate in informal employment. A portion of these workers would not be considered part of the labour force by standard labour market measures due in part to the irregularity of their work schedules. Accounting for these workers could boost participation rates by 2–3 percentage points. Moreover, the magnitude of labour supply from such work that could become available to the formal sector is sizable. It amounts to roughly 700,000 full-time equivalent jobs or 3.5 per cent of the labour force on average over the third and fourth quarters of 2018. This additional margin of labour market supply may be contributing to reducing wage pressures.

Suggested Citation

  • Olena Kostyshyna & Corinne Luu, 2019. "The Size and Characteristics of Informal (“Gig”) Work in Canada," Staff Analytical Notes 2019-6, Bank of Canada.
  • Handle: RePEc:bca:bocsan:19-6
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    References listed on IDEAS

    as
    1. Lawrence F. Katz & Alan B. Krueger, 2019. "Understanding Trends in Alternative Work Arrangements in the United States," NBER Working Papers 25425, National Bureau of Economic Research, Inc.
    2. Marc-André Gosselin & Mikael Khan, 2015. "A Survey of Consumer Expectations for Canada," Bank of Canada Review, Bank of Canada, vol. 2015(Autumn), pages 14-23.
    3. Bracha, Anat & Burke, Mary A., 2016. "Who counts as employed?: informal work, employment status, and labor market slack," Working Papers 16-29, Federal Reserve Bank of Boston.
    4. Jonathan Lachaine, 2018. "Applying the Wage-Common to Canadian Provinces," Staff Analytical Notes 2018-16, Bank of Canada.
    5. Bracha, Anat & Burke, Mary A., 2017. "Wage inflation and informal work," Current Policy Perspectives 18-2, Federal Reserve Bank of Boston.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Labour markets; Recent economic and financial developments;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

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