Job Market Paper
Workers’ Preferences over Payment Schedules: Evidence from Ridesharing Drivers
This paper investigates the importance of quick remuneration for gig workers. To explore this question, I run a large-scale survey experiment with ridesharing drivers in Brazil. The main finding is that the median driver would be willing to forgo a third of their potential earnings to be paid on the same day of their rides, compared to the alternative of being paid a month later. Such a strong preference for quick pay seems to be associated with liquidity constraints, as drivers under heavier financial stress are more likely to prioritize same-day remuneration. I also document that priming drivers to think about their personal budget makes them more inclined to favor larger (instead of faster) payments, suggesting that pay-me-now can be a default choice for this population. These results advance the literature on job attributes by showing that payment timing is a relevant aspect of an occupation. This paper also contributes to the gig work debate by emphasizing that digital platforms are best positioned to offer agile pay schemes, which help workers address liquidity shortages in the short run but might induce poverty traps over the long run.
PDF | VoxTalks Podcast Episode
Publications
Occupations and Wealth in Developing Countries
Revue d’économie du développement, 2022
To what extent is the workers’ occupational category (whether someone is an employer, an employee, an own-account worker, or an unpaid family worker) associated with their material living conditions? This short paper looks at the distribution of employment categories over different wealth levels in 1,313 regions from 46 low- and middle-income countries. We find that, despite a wide diversity in the composition of those markets, own-account and family workers are consistently overrepresented among the poorest members of the employed population, as measured by household assets.
Other research in progress
When You Can’t Afford to Wait for a Job: The Role of Time Discounting for Own-Account Workers in Developing Countries, with David N. Margolis
Frictional labor markets impose a fundamental trade-off: individuals may work on their own at any time, but can only take a potentially better-paid wage job after spending some time looking for it, suggesting that intertemporal considerations affect how people choose their occupation. We formalize this intuition under the job search framework and show that a sufficiently high subjective discount rate can justify the choice for own-account work even when it pays less than wage work. With this simple model, we estimate a lower bound for the discount rate that is implicit in the occupational choice of urban own-account workers in Brazil. We find that at least 65 percent of those workers appear to discount the future at rates superior to those available in the formal credit market, which suggests constrained occupational choice. Finally, we show that our estimated lower bound of the time preference is positively associated with food, clothing, and housing deprivation.