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Evolving the U.S. Department of Labor for the New Workforce

September 2013

William M. Rodgers III, The State University of New Jersey and the National Poverty Center, University of Michigan, Sarah Horowitz, Freelancers Union, and Gabrielle Wuolo, Freelancers Union

Download '2013-11-npc-working-paper.pdf'.


This paperís goal is to use the Freelancers Unionís 2007 to 2011 annual Independent Worker Survey to estimate the extent to which client nonpayment is a problem, and estimate the ability of a written contract to reduce the odds of nonpayment.

We develop tests for non-response and sample selection biases. Due to a lack of instrumental variables, we can only speculate on the size of the bias due to contract useís endogeneity.

IWS respondents tend to have higher income, are better educated, older, and have more experience as independent workers, tend to live in NY State, and work in high-wage industries.

Contract use is associated with income that is 13.7% higher than without using a contract. For the NY State respondents, the figure is 21.7%.

Contract use reduces nonpayment. However, when used, 38.8% of respondents still had trouble getting paid. One-third were paid late. Ten percent were either paid less than the agreed upon amount or were never paid.

Employment, Unemployment, and the Labor Market