The Gender Earnings Gap in the Gig Economy: Evidence from over a Million Rideshare Drivers

Cook, Cody; Diamond, Rebecca; Hall, Jonathan V.; List, John A.; Oyer, Paul

doi:10.3386/w24732

Cited by 136 publications

(105 citation statements)

References 37 publications

(3 reference statements)

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“…We test a number of plausible mechanisms that help explain the sorting of individuals into these types of alternative business opportunities. Our findings therefore contribute to recent work by Katz & Krueger (2017) who investigate the influence of unemployment in the rise of alternative work, Cook et al (2018), who consider the role of gender and particularly the gender earnings gap using data from Uber, and Chen et al (2017) who, also using data from Uber, document the positive wage and earnings effect of flexible work. Relatedly, Burtch et al (2018) analyze how online intermediaries influence local entrepreneurial activity by showing that entrepreneurship (measured with survey data and Kickstarter campaigns) decreases in local areas after the introduction of Uber.…”

supporting

confidence: 50%

The Geography of Alternative Work

Bäckman

Hanspal

2018

SSRN Journal

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Labor markets are changing. A recent trend is the rise of alternative work arrangements, most able demonstrated by the rise of Uber and similar companies who supply a product but do not formally employ the individuals who sell those products. The share of employees in alternative work arrangements rose by more than 5 percentage points over the past decade, from 10.7 percent to 15.8 percent of the labor force in the United States, a share that is likely to increase as technology advances. Whether this trend is positive or negative for workers is debated, where proponents argue that workers are now able to flexibly set their own schedules and thereby increase their labor supply, and detractors argue that independent work makes for more volatile income and allows companies to avoid paying benefits to workers.The key in evaluating the relative importance of these two arguments is to understand who participates in alternative work arrangements, since this enables us to determine how many workers are gaining from flexibility and how many are losing from increased insecurity. In this paper we describe the participants in a specific form of intermediated work -direct selling through a Multi-Level Marketing (MLM) firm. In a MLM business, individuals join as independent contractors and sell goods provided by the company to their own customers. The business model relies on individual retailers' commission-based product sales direct to customers and on their ability to recruit new members into the company. More than 5 million Americans had a part or full-time involvement as a business builder in a direct-selling company in 2016, corresponding to approximately 3 percent of the labor force, and the total number of Americans involved with direct selling companies increased 30 percent from 2011 to 2016.We use data from a Freedom of Information Act to the Federal Trade Commission to investigate the geography and determinants of participation with a specific MLM firm. Our data consists of 350,000 individuals who lost money running a MLM business between 2009 and 2015 and whom the FTC reimbursed for a fraction of their losses. We link the participants to a county and examine how county-level determinants correlate with MLM participation, allowing us to evaluate if this type of business attracts individuals who likely value flexibility or if it attracts individuals who would value income security but are unable to achieve it. Because most individuals who join a MLM do not experience any financial gains (in contrast to the often rosy marketing claims), we also evaluate if higher losses are concentrated in areas where individuals can afford them.Our results suggest that MLM incidence is higher in middle-income and in areas with relative female labor force participation. We do not find strong evidence that MLM activity is a substitute for unemployment, but we do find some evidence that MLM activity is correlated with certain types of entrepreneurship. We also find a positive relationship between financial development and MLM incidence...

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supporting

confidence: 50%

The Geography of Alternative Work

Bäckman

Hanspal

2018

SSRN Journal

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“…It is also worth considering the possibility that certain factors contributing to the pay gap are not discriminatory. Consistent with gender differences observed in both the psychological literature (e.g., Trivers, ; Buss, ; Shackelford et al, ; Oaxaca & Ransom ; Wang et al, ) and pay gap analyses that have been able to include observed differences consistent with gender differences in psychological attributes (e.g., Bolotnyy & Emanuel, ; Cook et al, ), it may be possible that men and women are, on average, different in ways which are not problematic from a discrimination perspective. However, at the same time, just because there may be biological or evolutionary explanations for group differences do not suggest that the continued existence of such differences is ideal.…”

Section: Discussionmentioning

confidence: 72%

“…If men and women, on average, possess different characteristics, abilities, or interests that are compensated differently in the labor market, then such differences could manifest in group-level differences in pay. For instance, if males and females differ on various psychological dimensions (whether due to upbringing, culture, genetics, biology or some other ultimate cause), certain pay differences may manifest which are truly the result of different individual preferences and life choices, similar to those observed in Bolotnyy and Emanuel (2018) and Cook et al (2018). Such differences may be seen as a non-problematic form of pay gap so long as these differences truly are not the result of discrimination of any kind.…”

Section: Theoretical Perspectives and Hypothesesmentioning

confidence: 87%

Examining the gender pay gap among financial planning professionals: A Blinder‐Oaxaca decomposition

et al. 2019

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The financial planning industry has been identified as having one of the largest gender pay gaps. This study examines whether male and female financial planners receive equal pay for equal work. Using detailed data on the backgrounds and practices of 710 financial planners, an unadjusted pay gap of 19% was observed between male and female financial planners. Blinder‐Oaxaca decomposition analysis suggests that 91% of this pay gap can be explained by a model accounting for differences in important individual characteristics including job role, experience, team structure, hours worked, revenue produced, professional designation status, marital status, and psychological factors such as degree of motivation by income potential, performance pay, work‐life balance, and stable pay; resulting in an unexplained gender pay gap of 1.8%, which is much smaller than the commonly cited pay gap among male and female financial planners. This unexplained pay gap may suggest unequal pay for equal work but could alternatively result from other unobservable differences. Degree of motivation by performance pay and revenue production explained the largest portions of the pay gap. Implications regarding gender‐based discrimination in financial planning are discussed.

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“…185 Less controversially, rating and review systems are pointed to (eg, by the European Commission) as an important safeguard for sharing or collaborative economy platforms, especially in the absence of the relevant information or, in some circumstances, the inapplicability of consumer protection rules. 186 The extent to which the reliance upon rating and reputation may have a disparate impact on some groups and constitute a form of (albeit possibly unintended) discrimination, 187 and how 'neutral' systems, even where there is no evidence of consumer discrimination, can still produce unequal outcomes on vectors such as gender pay, 188 has been highlighted. Although the specific area of credit benefits from explicit prohibitions on the use of certain data, even this area sees the use of alternative data sources that may aid in discrimination in practice.…”

Section: The Complexities Of Regulating Ratingsmentioning

confidence: 99%

The Chinese Social Credit System: A Model for Other Countries?

Síthigh

Siems

2019

Modern Law Review

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Many countries know financial consumer credit ratings, and recent years have also seen a proliferation of rating systems in relation to online platforms and in the ‘sharing economy’, such as eBay, Uber and Airbnb. In the view of many Western observers, however, the emerging Chinese Social Credit System indicates a paradigm shift compared to these former rating systems as it aims for a comprehensive and uniform social rating based on penalty and award mechanisms. By contrast, this article suggests that the evolving forms of the Chinese system should be seen as a specific instance of a wider phenomenon. Thus, it develops a framework that compares different rating systems by reference to their drafters, users, aims, scoring systems, application, use of algorithms, enforcement and accountability; it identifies shortcomings of both low and high interventionist rating systems; and it discusses a range of regulatory approaches and emerging issues that law makers should consider.

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The Gender Earnings Gap in the Gig Economy: Evidence from over a Million Rideshare Drivers

Cited by 136 publications

References 37 publications

The Geography of Alternative Work

The Geography of Alternative Work

Examining the gender pay gap among financial planning professionals: A Blinder‐Oaxaca decomposition

The Chinese Social Credit System: A Model for Other Countries?

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