Employment Relationships in the New Economy

Abstract

It is often argued that 'new economy' jobs are less likely to use traditional employment relationships, and more likely to rely on 'alternative' or 'contingent' work. When we look at new economy jobs classified on the basis of employment in high-tech industries, we do not find greater use of contingent or alternative employment relationships. However, when we classify new economy workers based on residence in high-tech cities, contingent and alternative employment relationships are more common, even after accounting for the faster employment growth in these cities. Finally, defining 'new economy' more literally to be those industries with the fastest growth yields the most striking differences, as workers in the fastest-growing industries are much more likely to be in contingent or alternative employment relationships, with a large share of this difference driven by employment in the fast-growing construction and personnel supply services industries where employment is perhaps 'intrinsically' contingent or alternative. While subject to numerous qualifications, the combined evidence gives some support to the hypothesis that the new economy may entail a possibly significant and long-lasting increase in contingent and alternative employment relationships.