Democratizing the Economy or Introducing Economic Risk? Gig Work During the COVID-19 Pandemic

Abstract

Though the growth of the gig economy has coincided with increased economic precarity in the new economy, we know less about the extent to which gig work (compared with other self-employment arrangements and non-gig work) may fuel economic insecurity among American households. We fill this gap in the literature by drawing on a sample of 4,756 workers from a unique national survey capturing economic hardships among non-standard workers like app- and platform-based gig and other self-employed workers during the COVID-19 pandemic. Results from generalized boosted regression modeling, utilizing machine learning to account for potential endogeneity, demonstrated that gig workers experienced significantly greater economic hardship than non-gig and other self-employed workers during the pandemic. For example, gig workers were more likely to experience food insecurity, miss bill payments, and suffer income loss compared with non-gig and other self-employed workers during the pandemic. While household liquid assets endowment prior to the pandemic reduced the effect of gig work on experiencing economic hardships, having dependent children in the household increased this effect. Thus, contrary to democratizing entrepreneurship opportunities, these findings suggest that the expansion of the gig economy may exacerbate labor market inequality, where wealth-endowed families are protected against adverse economic consequences of the gig economy. We discuss the implications of these findings for inequality-reducing labor market policies, including policies that account for the interconnectedness of family and the labor market.