Gig Work as Income Insurance during Unemployment : Evidence from Germany

While the gig economy has been growing rapidly, evidence on its implications for the labor force remains sparse. This paper shows that gig work can buffer income losses arising from unemployment shocks. Matching a large sample of administrative employment data with information on platform entry, we demonstrate that recently unemployed workers are more likely to take up gig work and less likely to receive unemployment benefits (UB) when a gig delivery platform is available to them. Our identification relies on a difference-in-differences strategy, exploiting the staggered market entry of gig platforms across German districts. The analysis suggests that the effects are permanent and heterogeneous across various socioeconomic dimensions. Moreover, we discuss substantial fiscal externalities that could arise as a consequence of workers’ substitution of unemployment insurance with income from gig work