Grateful for the Work
Delivering Higher Pay? The Impacts of a Task-Level Pay Standard in the Gig Economy
Yuan An, Andrew Garin & Brian Kovak
NBER Working Paper, December 2025
Abstract:
How does a task-level minimum pay requirement for gig workers affect their earnings and employment? We study this question in the context of a January 2024 law in Seattle that establishes a per-task minimum pay standard for app-based delivery workers. Drawing on novel cross-platform, trip-level gig activity data, we compare earnings and employment trajectories around the implementation of the law for workers who were doing delivery work in Seattle before the reform against workers who had been active in other regions of Washington State. We find that the minimum pay law raised delivery pay per task, though the increases in base pay per task were partially offset by a substantial reduction in average tips, a major component of delivery pay. At the same time, the policy led to a reduction in the number of tasks completed by highly attached incumbent drivers (but not an increase in exit from delivery work), completely offsetting increased pay per task and leading to zero effect on monthly earnings. We find evidence that drivers experienced more unpaid idle time and longer distances driven between tasks, but find no evidence that drivers reduced their total time working on delivery apps and only limited evidence of switching from delivery to ride-hailing work. Using a simple model of the labor market for platform delivery drivers, we show that our evidence is consistent with free entry of drivers into the delivery market driving down the task-finding rate until expected earnings return to their pre-reform level. These findings highlight the challenges of raising pay in spot markets for tasks where there is free entry of workers.
Simply Can’t Wait: Evaluating the Effect of California’s Fast-Food Minimum Wage Increase
Hitanshu Pandit
Northeastern University Working Paper, October 2025
Abstract:
This paper estimates short-run employment effects of California’s sectoral minimum wage for fast-food restaurants. On April 1, 2024, covered limited-service chains faced a $20 hourly floor while the statewide minimum wage was $16 (up from $15.50 in 2023). Using establishment-level mobility data and a difference-indifferences design restricted to “clean” counties without local wage ordinances, I proxy on-site staffing with weekly long-duration device visits (>4 hours). Baseline estimates indicate an average 8% decline in on-site employment at treated outlets relative to comparable full-service and retail establishments. An event-study shows no pre-trends and a gradual, persistent post-announcement decline, consistent with anticipatory staffing adjustments. Placebo estimates for exempt “enclosed” venues are null, and effects are similar across urban and rural locations. The results imply that a sectoral wage floor induces meaningful reductions in labor utilization on intensive margins (hours, shift density) rather than immediate large-scale job loss.
Exposure to Science and Scientific Careers: Evidence from Minimum Wage Increases and University Lab Employment
Ina Ganguli & Raviv Murciano-Goroff
NBER Working Paper, September 2025
Abstract:
We study how exposure to scientific research in university laboratories influences students’ pursuit of careers in science. Using administrative data from thousands of research labs linked to student career outcomes and a difference-in-differences design, we show that state minimum wage increases reduce employment of undergraduate research assistants in labs by 7.4%. Undergraduates exposed to these minimum wage increases graduate with 18.1% fewer quarters of lab experience. Using minimum wage changes as an instrumental variable, we estimate that one fewer quarter working in a lab, particularly early in college, reduces the probability of working in the life sciences industry by 2 percentage points and of pursuing doctoral education by 7 percentage points. These effects are attenuated for students supported by the Federal Work-Study program. Our findings highlight how labor market policies can shape the career paths of future scientists and the importance of budget flexibility for principal investigators providing undergraduates with research experience.
Performance or Principle: Resistance to Artificial Intelligence in the U.S. Labor Market
Simon Friis & James Riley
Harvard Working Paper, October 2025
Abstract:
From genetically modified foods to autonomous vehicles, society often resists otherwise beneficial technologies. Resistance can arise from performance-based concerns, which fade as technology improves, or from principle-based objections, which persist regardless of capability. Using a large-scale U.S. survey quota-matched to census demographics and assessing 940 occupations (N = 23,570 occupation ratings), we disentangle these sources in the context of artificial intelligence (AI). Despite cultural anxiety about artificial intelligence displacing human workers, we find that Americans show surprising willingness to cede most occupations to machines. Given current AI capabilities, the public already supports automating 30% of occupations. When AI is described as outperforming humans at lower cost, support for automation nearly doubles to 58% of occupations. Yet a narrow subset (12%) -- including caregiving, therapy, and spiritual leadership -- remains categorically off-limits because such automation is seen as morally repugnant. This shift reveals that for most occupations, resistance to AI is rooted in performance concerns that fade as AI capabilities improve, rather than principled objections about what work must remain human. Occupations facing public resistance to the use of AI tend to provide higher wages and disproportionately employ White and female workers. Thus, public resistance to AI risks reinforcing economic and racial inequality even as it partially mitigates gender inequality. These findings clarify the “moral economy of work,” in which society shields certain roles not due to technical limits but to enduring beliefs about dignity, care, and meaning. By distinguishing performance- from principle-based objections, we provide a framework for anticipating and navigating resistance to technology adoption across domains.
Does Greater Economic Freedom Elevate the Labor Force Participation Rate? State-Level Panel Data Evidence for the U.S.
Richard Cebula et al.
Journal of Labor Research, December 2025, Pages 116-129
Abstract:
Against the recent historical backdrop, wherein there is some fear that the adverse labor market effects of the Great Recession are permanent, this study revisits the academic literature on the impact of economic freedom on labor force participation rates in the U.S. In revisiting this strand of the literature that has previously focused mainly on the role played by labor market freedoms, we explore, using panel data for all 50 states from 2006 through 2022 (n = 850), the relationship between states’ overall levels of economic freedom and state-level labor force participation rates while controlling for household incomes, unemployment, poverty alleviation programs and other variables that are measured at the state level. Fixed effects regressions suggest that improvements in state-level economic freedom are associated with elevating their labor force participation rates by 1.2% to 3.1%, ceteris paribus. Lastly, when adopting a more causal inverse probability weighting approach (IPW), wherein noteworthy increases in state-level economic freedom (e.g., increases exceeding one point on the scale) are linked to changes in labor force participation rates, we find that exceeding one point on the scale is associated with labor force participation rates that are 2.1% higher.
Path Dependence in the Labor Market: The Long-run Effects of Early Career Occupational Experience
Jesse Bruhn et al.
NBER Working Paper, November 2025
Abstract:
We study the causal effect of different early career occupational experiences on labor market outcomes. To do so, we pair over two decades of administrative tax data with internal personnel records from one of the largest employers of young adults in the United States: the US Army. Enlistees work in a diverse and varied set of occupations, including non-combat roles like mechanics, legal services, financial specialists, cooks, dental hygienists, police officers, and network/computer specialists. Occupational eligibility is determined by test score cutoffs which we leverage in a series of 35 regression discontinuity designs. We find that a typical early career occupational experience generates a substantial amount of path dependence, with point estimates that suggest a 19p.p. increase in the likelihood of being observed in an identical or closely related occupation as much as 20 years later. The corresponding impact of different occupations on earnings are highly heterogeneous, yet predictable: long-run changes in the average earnings of the occupations applicants are pushed into, and pulled out-of, can explain over 60% of the causal variation across cutoffs, with point estimates that suggest improvements in occupational earnings premia translate dollar-for-dollar into economic success. Taken together, our results highlight the importance of early career occupational experience as a key channel for promoting long-run well-being among young adults who are not college bound.
The effects of negative labor market conditions at entry: Evidence from the 2004–05 NHL lockout
Chengyuan Hua & Brad Humphreys
Labour Economics, December 2025
Abstract:
We investigate the impact of a large negative labor market shock on short-run and long-run labor market outcomes of new entrants exposed to this shock. The shock, a labor dispute over a new collective bargaining agreement, resulted in the cancellation of the entire 2004-05 season in the National Hockey League (NHL). We compare career outcomes of new entrants exposed to this shock, players who declared for the 2004 draft, to career outcomes of new entrants in the 2003 draft who were not exposed, generating estimates of the average impact of the treatment on the treated. Results show that new entrants exposed to the shock experienced shorter careers than new entrants in the control group. The results also show strong effect heterogeneity based on observable worker characteristics. New entrants born in Europe benefited from exposure to the shock compared to new entrants born in North America, who were less likely to ever play in the NHL and had shorter careers than treated Europeans. Alternative employment opportunities in European hockey leagues represents a likely mechanism for these results.
Value without Employment
Simcha Barkai & Stavros Panageas
Journal of Finance, December 2025, Pages 3725-3770
Abstract:
Young firms' contribution to aggregate employment has been underwhelming. We show that a similar trend is not apparent, however, in their contribution to aggregate sales or stock market capitalization, implying that these firms have exhibited a high average-to-marginal revenue product of labor. We study the implications of a gradual shift in the average-to-marginal revenue product of labor within a model of dynamic firm heterogeneity. We show that this shift provides (i) a unified explanation for several aspects of the decline in dynamism and (ii) a possible explanation for why large declines in young-firm employment may have only a moderate effect on aggregate output and consumption.
The Impact of Amazon Facilities on Local Economies
Vikram Pathania & Serguei Netessine
Journal of Policy Analysis and Management, Winter 2026
Abstract:
A number of large companies deploy facilities -- factories, warehouses, shopping malls -- that employ thousands of people directly and indirectly. Local governments have been enticing these companies with various financial incentives. But how much economic growth do these facilities promote, if any? We study this question using Amazon distribution facilities as the case in point. We show evidence of a positive effect of opening Amazon's distribution facilities on counties' economic outcomes. We focus on midsized counties in which Amazon opened facilities in the years 2014–2017 because we have good controls for these counties. We find a selection effect where Amazon locates its facilities, and we address this issue. Our preferred methodology is Callaway–Sant'Anna difference-in-differences combined with matching. After Amazon's entry, in our preferred specification, we find that the employment-to-population ratio in the treated county increased by 0.0087 (+1.46% at the mean), the poverty rate decreased by 0.36 percentage points (−2.69%), and the median household income increased by $1413 (+2.33%). We present evidence to argue that our findings can likely be interpreted as causal and plausible.
The Hedgehog’s curse: Knowledge specialization and displacement loss
Victor Hernandez Martinez, Hans Holter & Roberto Pinheiro
Labour Economics, December 2025
Abstract:
This paper studies the impact of knowledge specialization on earnings losses following displacement. We develop a novel measure of human capital specialization based on the share of knowledge areas that are irrelevant for an occupation. Combining our measure with individual labor histories from the NLSY, we show that workers with human capital specialization one standard deviation larger than average suffer earnings losses 4.8 percentage points larger than average per year following exogenous displacement. A longer average duration of non-employment spells and occupational downgrading are the two mechanisms that explain the negative effect of specialization on post-displacement earnings.