Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2018:13: The Geography of Alternative Work

Claes Bäckman () and Tobin Hanspal ()
Additional contact information
Claes Bäckman: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Tobin Hanspal: Research Center SAFE, Goethe University, Frankfurt, Germany

Abstract: The increase in alternative working arrangements has sparked a debate over the positive impact of increased flexibility against the negative impact of decreased financial security. We study the prevalence and determinants of intermediated work in order to document the relative importance of the arguments for and against this recent labor market trend. We link data on individual participation and losses from a Federal Trade Commission settlement with a Multi-Level Marketing firm with detailed county-level information. Participation is greater in middle-income areas and in areas where female labor market non-participation is higher, suggesting that flexibility offers real benefits. However, losses from MLM participation are higher in areas with lower education levels and higher income inequality, suggesting that the downsides of alternative work are particularly high in certain demographics. Our results illustrate that the advantages and disadvantages of alternative work arrangements accrue to different groups.

Keywords: Intermediated work; Multi-level marketing; Gig-economy; Entrepreneurship; Consumer financial protection

JEL-codes: G21; J21; J22; L26

49 pages, May 30, 2018

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