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The size and characteristics of informal (‘gig’) work in Canada

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.