Selected Publications

Yu-Wei Lin: When Gig Workers No Longer Gig: The Impact of California Assembly Bill 5 on the Online Labor Market, forthcoming in Information Systems Research

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Abstract

There is a widespread debate over how gig workers should be classified. The passage of California Assembly Bill 5 (AB5)—a landmark legislation aimed at correcting the misclassification of gig workers—has significant implications for workers, platforms, regulators, and the broader economy. Leveraging the enforcement of AB5 as a natural experiment, this study empirically examines its impact on gig workers’ earnings in California. Using data from a leading online labor market that connects employers and gig workers, we apply a difference-in-differences approach and find that the monthly earnings for California-based gig workers increased significantly relative to those in other states. This increase, however, is driven by longer working hours, which offset the decline in hourly rates. These findings are consistent with search theory, which suggests that, although some employers may be deterred by the rising hiring cost, many are likely to prioritize job matching during the hiring process rather than being solely driven by cost reduction. Employers may offset the rising costs of hiring California-based workers by lowering hourly pay, and workers respond to this change by increasing their hours to access and accrue employment-related benefits and sustain their total income. These findings highlight the unintended consequences of AB5, such as lowered hourly rates and extended working hours. This research contributes to the literature on the online labor market and provides important implications for policymakers seeking to follow this initial effort, as well as for platform managers aiming to implement this and similar laws effectively.