A1447
Title: Joining the gig workforce: A (potentially) one-way trip with an expensive return ticket
Authors: Jessie Wang - National Institute of Health, National Institute on Aging and RAND Corporation (United States) [presenting]
Kristina Sargent - Middlebury College (United States)
Abstract: A dynamic search and match model is proposed to explore the labor market implications of a booming gig economy. The economy has a conventional and a gig sector, with workers searching in both. There are two types of workers: those who never consider gig employment, and those who do under certain conditions. Workers match with gig positions with probability one, but face more frictions in gaining employment in the conventional sector afterwards. As a result, gig work plays an important role as an alternative to collecting unemployment insurance benefits for workers, and the gig sector absorbs labor market slack from the conventional sector. We show that the barriers to returning to the conventional market from the gig sector lead to an increased proportion of gig workers over time. By comparing the implications of the model under various levels of exposure to gig work, we explore the nature of the sector and the opportunities and consequences that come with it. The benchmark model provides insights into the rise of the gig economy, highlighting its impact on low-wage workers and the segmentation of the labor markets. Counterfactual exercises reveal the sensitivity of the sector to labor market conditions and policy interventions.
