How Does Savings Affect Participation in the Gig Economy? Evidence from a Field Experiment
*Names in bold indicate Presenter
Data and Methods: This paper uses data from the two waves of the 2017 Household Financial Survey (HFS). The first wave of the HFS, which was offered to a random subset of TurboTax Freedom Edition LMI tax filers, was administered immediately after tax-filing. In addition to questions about respondents’ financial circumstances and characteristics, the survey included questions about respondents’ participation in the gig economy. Six months after tax-filing, a follow-up survey was administered. Survey responses were merged with individual-level administrative tax data.
When filing their taxes, HFS respondents participated in a randomized controlled trial testing the effects of several low-touch behavioral interventions designed to encourage filers to deposit their refunds into savings vehicles. Savings interventions were embedded directly in the tax preparation software. We conduct both intent-to-treat and treatment-on-treated analyses to examine the effects of this experiment (and, more generally, refund savings) on participation in the gig economy. Due to the heterogeneity in the LMI population, we conduct subsample analyses in addition to analyses on the full sample.
Results: Although we find that refund savings had no effect on gig economy participation for our LMI sample as whole, we find strong heterogeneous effects of refund savings in different subsamples. For students, the interventions reduced the likelihood of working in the gig economy in the six months after tax-filing. For liquidity-constrained non-students, however, the interventions increased the likelihood of working in the gig economy. We also find evidence that these effects are occurring at the extensive margin.