Page 444 - Invited Paper Session (IPS) - Volume 2

IPS320 Tine Cordes et al.

Testing dependent contractors in the Danish
Labour Force Survey
Tine Cordes, Thomas Thorsen
Statistics Denmark, Copenhagen, Denmark

Abstract
The new International Classification of Status in Employment (ICSE) from 2018
introduces a different view on the traditional dichotomy between self-
employed and employees. Instead employment is divided both according to
authority (dependent and independent workers) and according to risk
(employment for profit and employment for pay). The dividing lines between
these categories are not always clear-cut, which presents challenges for
national statistical institutes when conducting their Labour Force Surveys (LFS).
In particular, the category dependent contractors consisting of dependent
workers who work for profit is presumed to be difficult to measure.
In the second quarter of 2017 the International Labour Organization (ILO) had
some questions added to the Danish LFS in order to test their quality and their
suitability to measure the concept of dependent contractors. Three tentative
definitions of dependent contractors were constructed by ILO from these
questions.
The groups found were relatively disjunctive, and the characteristics that were
expected to be defining for dependent contractors did not seem to exist
together very often. Moreover none of the three groups seemed to be as
exposed, as one might expect to be the case for dependent contractors.
Even if the phenomenon of dependent contractors was widely acknowledged,
an empirically proven delineation of dependent contractors was not
established when the ICSE was adopted. Instead some potential characteristics
were included in the adopted ICSE.
Revisiting the Danish test in this light, this paper has its main focus on those
of the tested questions that are considered relevant in measuring dependent
contractors according to the new ICSE. These include if another economic unit
- controls the price for the goods or services provided,
- controls working arrangements such as working time, or
- serves as a dominant customer.
The suitability of the specific questions regarding the identification of
dependent contractors is discussed by presenting additional relevant
characteristics of the respondents. Some of the characteristics are found in the
LFS itself, while others are found by linking to administrative microdata.
Finally, the results are used to discuss the concept and measurability of
dependents contractors in the relevant economic setting. Besides evaluating

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