Entrepreneurship and the Gig Economy: Evidence from U.S. Tax Returns

Abstract

Platform intermediation of goods and services has considerably transformed the U.S. economy. We use administrative data on U.S. tax returns to study the effect of the gig economy on entrepreneurship. We find that gig workers are more likely to become entrepreneurs, particularly those who are lower income, younger, and benefit from flexibility. We track all newly created firms in the economy and show that the gig economy facilitates learning by potential entrepreneurs who experiment with starting riskier firms. Overall, our findings provide novel evidence about how on-the-job learning promotes entrepreneurial entry and shifts the type of firms started by entrepreneurs.

Keywords: Entrepreneurship, Gig Economy, Learning, Experimentation

JEL Classification: G30, J21, J22, J24, L26