The scale of the so-called gig economy isn’t as significant as some reports suggest, according to a new study by the Economic and Social Research Institute (ESRI).
The research found the incidence of part-time or “contingent” employment in the Republic remains at pre-recessionary levels despite claims it has been increasing over time.
The study said that part-time employment here ranged from 8 to 9 per cent of total employment between 1998 and 2005, before increasing to more than 10 per cent between 2011 and 2013 when the economy was mired in recession. However, since then it has fallen back to its pre-recession level and remains significantly lower than in other European states, some four percentage points below the European Union average.
"The evidence does not support the view that the incidence of contingent employment has been increasing steadily over time in Ireland, " the ESRI concluded.
Flexible contracts
Internationally there has been a rise in the number of people who say their employment involves some sort of flexible contract, which does not guarantee them a minimum number of hours.
In the UK sports retailer Sports Direct has a certain cohort of staff on zero-hours contracts, meaning the employer is not obliged to provide a minimum number of working hours per week.
The ESRI's research, which makes use of three different datasets including the Quarterly National Household Survey compiled by the Central Statistics Office (CSO), said the two principal components of contingent employment in Ireland are employees on temporary contracts and freelances.
Temporary employment contracts accounted for 80 per cent of contingent workers and has not shown any significant signs of increasing in recent years, the report noted. While it increased slightly during the post-recession period of 2011 to 2013 to just over 8 per cent of total employment, it has since returned to its long-run average of 7 per cent of total employment in 2016.
In contrast, freelance employment has been increasing steadily in Ireland since 1998, the study noted. However, it represents a relatively minor component of the Irish labour market, accounting for just over 2 per cent of total employment and 12 per cent of self-employment in 2016.
The report also highlighted that in contrast to other EU countries temporary employment in Ireland was not concentrated among low-skilled occupations. In contrast, it is found across all education levels, sectors, occupations and organisational sizes.
‘Stepping stone’
This is reflected in the pay differential between permanent and temporary employment – known as the pay penalty – which was 21 per cent in Ireland in 2014 compared with the EU average of 29 per cent.
The report also found that temporary employment did not generally act as “a stepping stone” to permanent employment. But temporary workers reported similar levels of job satisfaction as their permanent counterparts.
“The issue of contingent employment is highly topical and it is important that we begin to establish an evidence base for Ireland,” said Prof Séamus McGuinness of the ESRI.
“The evidence in this report suggests that it is not an increasing phenomenon in Ireland,” he said. “The contrasting impacts of temporary contracts on earnings and job satisfaction suggests that workers might enter such relationships for a variety for reasons,” he said.
