Nearly a tenth of US workers earn money through the gig economy. As the gig economy continues to grow, there is an increased need to understand what influences the decision to work in this segment of the labor market. In this paper, using panel survey data that were merged with administrative tax records and results form a tax-time savings experiment, we apply an instrumental variable research design to investigate how the decision to save the tax refund affects participation in the gig economy for low- and moderate-income (LMI) households. Although refund savings had no effect on participation in the gig economy for the full sample, we found strong effects in our subsample analyses. Refund savings reduced gig participation for LMI students by 28% but increased gig participation for liquidity-constrained non-students by 44%. We conclude by discussing how these findings speak to the importance of liquid assets in LMI households.
Author(s): Sam Bufe, Olga Kondratjeva, Stephen Roll, Ellen Frank-Miller, Michal Grinstein-Weiss
