A Dynamic Empirical Study on Income Instability of Freelancers

Abstract

The purpose of this paper is to empirically analyze the income instability of freelancers, which is increasing recently. To this end, this paper analyzed and compared wage workers with conditional transition probability by income decile, Shorrocks and Fields-Ok index, and Jenkins-Van Kerm index using data from 2008 to 2019 of the Korea Labor Panel. Analyzing income mobility is related to economic mobility and social mobility. Therefore, analyzing the income mobility of freelancers can be said to be an empirical analysis of income instability. As a result of the conditional transfer probability analysis, freelancers were more likely to fall into the poverty trap because they were in the first decile (lowest income group) and were less likely to stay in the highest income group. As a result of analyzing income mobility using the Shorrocks and Fields-Ok index and the Jenkins-Van Kerm index, it was found that the income mobility of freelancers is more volatile than that of wage workers, so income is unstable. It can be inferred that many freelancers are constantly anxious about the sustainability of jobs and income. Therefore, for income stability for freelancers, it is necessary to prepare policies in terms of labor unit price standards and time invested in labor. Major policy tasks include the establishment of official contracts and appropriate remuneration standards, promotion of fair and transparent contracts to prevent free working hours, preparation of welfare and income safety net support measures suitable for freelancers, organization of interest and representation to strengthen freelancers' bargaining power, and activity support is required.