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

76 Pages Posted: 24 Oct 2023 Last revised: 4 Nov 2023

See all articles by Matthew Denes

Matthew Denes

Carnegie Mellon University - Tepper School of Business

Spyridon Lagaras

University of Illinois at Urbana-Champaign - Department of Finance

Margarita Tsoutsoura

Washington University in Saint Louis, John M. Olin Business School

Date Written: September 12, 2023

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

Suggested Citation

Denes, Matthew and Lagaras, Spyridon and Tsoutsoura, Margarita, Entrepreneurship and the Gig Economy: Evidence from U.S. Tax Returns (September 12, 2023). Available at SSRN: https://ssrn.com/abstract=4592790 or http://dx.doi.org/10.2139/ssrn.4592790

Matthew Denes (Contact Author)

Carnegie Mellon University - Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

HOME PAGE: http://sites.google.com/site/matthewdenes

Spyridon Lagaras

University of Illinois at Urbana-Champaign - Department of Finance ( email )

515 East Gregory Drive
4035 Business Instructional Facility
Champaign, IL Champaign 61820
United States

HOME PAGE: http://sites.google.com/view/spyridonlagaras/

Margarita Tsoutsoura

Washington University in Saint Louis, John M. Olin Business School ( email )

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