DP13885 Gig-Labor: Trading Safety Nets for Steering Wheels

Author(s): Vyacheslav Fos, Naser Hamdi, Ankit Kalda, Jordan Nickerson
Publication Date: July 2019
Keyword(s): credit delinquencies, gig-economy, Household Debt, labor markets, Unemployment insurance
JEL(s): D10, E24, H53, J23, J65
Programme Areas: Labour Economics, Financial Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13885

This paper shows that the introduction of the "gig-economy" changes the way employees respond to job loss. Using a comprehensive set of Uber product launch dates and employee-level data on job separations, we show that laid-off employees with access to Uber are less likely to apply for UI benefits, rely less on household debt, and experience fewer delinquencies. Our empirical strategy is based on a triple difference-in-difference empirical model, comparing the difference in outcome variables 1) pre- and post-layoff, 2) before and after Uber enters a market, and 3) between workers with and without the ability to participate on the ride-sharing platform (car-owners inferred from auto credit histories). In support of our identification strategy, we find no apparent pre-existing difference in outcomes in the months leading up to Uber's entry into a market. Moreover, the effects are severely attenuated for workers with an auto lease, for whom the viability of participating on the ride-sharing platform is significantly reduced. Overall, our findings show that the introduction Uber had a profound effect on labor markets.