Gig-Labor: Trading Safety Nets for Steering Wheels

Abstract

This paper shows that the introduction of the "gig-economy" changes the way employees respond to job loss. Using administrative data on unemployment insurance (UI) claims matched with the credit profiles of individuals in the U.S., 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 exploits both the staggered entry of Uber across cities and the differential benefit of Uber's entry across workers based on a proxy for car ownership. Effects are considerably attenuated for car-owners with an auto lease, for whom typical millage caps reduce the viability of participating on the ride-sharing platform, suggesting the results are not driven by time-varying differences in car-owners and non-owners. Overall, our findings show that the introduction of Uber had a profound effect on labor markets.

Keywords: gig-economy, labor markets, unemployment insurance, household debt, credit delinquencies

JEL Classification: D10, E24, H53, J23, J65