RESEARCH

Working Papers

"The Macroeconomic Effects of Gig Work: Insurance Against Labor Market Risk"

Abstract: This paper investigates the gig work as a novel form of self-employment that provides a safety net against labor market risks. I develop a quantitative macroeconomic model that highlights the distinct features of gig jobs, such as easy entry and exit and lower earnings, and successfully matches U.S. labor market data. Results show that the introduction of gig work reduces unemployment and raises wages for firm-employed workers, but discourages vacancy creation and shifts labor into lower-productivity jobs. Welfare improves across all groups, with the largest gains for uninsured unemployed individuals. Yet, this reallocation of labor results in a decline in aggregate output and productivity. These findings underscore a key policy trade-off: while gig work enhances income security and labor market flexibility, it may come at the cost of reduced productivity.

"Revisiting Labor Market Policies in the Presence of Fallback Self-employment"

Abstract: This paper examines how the availability of flexible self-employment as a fallback option shapes the effectiveness of labor market policies. I evaluate five key policy instruments: unemployment insurance (UI), firing costs, worker bargaining power (e.g., unionization), hiring subsidies, and improvements in job-matching efficiency. Counterfactual simulations reveal that policy impacts vary substantially depending on the presence of fallback employment and the dynamics of occupational transitions. Flexible self-employment amplifies the effects of UI benefit changes, mitigates the adverse consequences of increased firing costs and stronger bargaining power, and diminishes the effectiveness of active labor market programs. These patterns arise primarily because flexible self-employment functions as a viable substitute for unemployment. The findings underscore the need to design labor market policies that reflect the growing prevalence of nontraditional and flexible employment arrangements, such as gig work.