The Gig Economy, Smart Contracts, and Disruption of Traditional Work Arrangements

24 Pages Posted: 13 Nov 2018

See all articles by Seth Oranburg

Seth Oranburg

University of New Hampshire Franklin Pierce School of Law; Duquesne University - School of Law

Liya Palagashvili

George Mason University - Mercatus Center; State University of New York (SUNY) - Purchase College, Department of Economics

Date Written: October 22, 2018

Abstract

The rapid growth of technology is not only creating innovative goods and services, but it is also fundamentally altering the workplace and the traditional understanding of employee and employer relationships. This can be seen today with the rise of the gig economy and alternative work arrangements. Our paper seeks to explain how technology has reduced the cost of transacting with the market and lowering monitoring costs, and thereby driving the expansion of contracting, as seen in the rise of the gig economy. We then anticipate blockchain technology and smart contracts will further reduce transaction costs and continue to alter the employee-employer relationships, leading to more decentralized work that mirrors the fundamentals of "contract at-will" employment. This will have significant implications for labor law because the standard labor regulations surrounding health and retirements benefits to employees will lose relevance as the employee-employer relationship dissipates. We suggest that reforms to labor laws should move in the direction of portable-benefits solutions.

Keywords: gig economy, smart contracts, blockchain

Suggested Citation

Oranburg, Seth and Palagashvili, Liya, The Gig Economy, Smart Contracts, and Disruption of Traditional Work Arrangements (October 22, 2018). Available at SSRN: https://ssrn.com/abstract=3270867 or http://dx.doi.org/10.2139/ssrn.3270867

Seth Oranburg

University of New Hampshire Franklin Pierce School of Law ( email )

Two White Street
Concord, NH 03301
United States

Duquesne University - School of Law ( email )

600 Forbes Avenue
Pittsburgh, PA 15282
United States

Liya Palagashvili (Contact Author)

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

State University of New York (SUNY) - Purchase College, Department of Economics ( email )

735 Anderson Hill Road
Purchase, NY 10577
United States

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