Emilie Jackson is a post-doctoral scholar at the National Bureau of Economic Research (NBER) for the 2020-2021 academic year. In fall 2021, she will join Michigan State University as an Assistant Professor of Economics.
A growing number of American workers earn income through platforms in the gig economy which provide access to flexible work (e.g. Uber, Lyft, TaskRabbit). This major labor market innovation presents individuals with a new set of income smoothing opportunities when they lose their job. I use US administrative tax records to measure take up of gig employment following unemployment spells and to evaluate the effect of working in the gig economy on workers’ overall labor supply, skill acquisition, and earnings trajectory. To do so, I utilize penetration of gig platforms across counties over time, along with variation in individual-level predicted propensities for gig work based on pre-unemployment characteristics. In the short run, I show an increase in gig work following an unemployment spell and that individuals are correspondingly better able to smooth the resulting drop in income. However, individuals stay in these positions and are less likely to return to traditional wage jobs. Thus, several years later, prime-age (25-54) workers’ income lags significantly behind comparable individuals who did not have gig work available. Among older workers (55-69), I find an increase in gig work corresponds to a postponement of Social Security retirement benefits and a reduction in receipt of Social Security Disability Insurance (SSDI).