Gig Workers and Mandated Benefits: Evidence from Washington Ride-share Regulation

Are legal rules requiring minimum benefits for gig workers effective in improving gig worker welfare? If independent contractor wages increase, how does their labor supply respond? To study these questions, I explore the effects of a recently enacted state-wide legislation in Washington mandating minimum transportation network company driver pay rates and paid sick leave on counties that did not previously have similar legislation. Relative to my constructed synthetic controls, I estimate that the law increased average nonemployer establishment earnings by about $1,191 and decreased the number of establishments by about 8 per 100,000 residents during the first year it was effective. These differences are only associated with p-values of 0.08 and 0.21, respectively, under placebo testing. Hence, I cannot reject the null hypothesis of zero effect at the 5% level. Additional descriptive analysis using household survey data suggests that the new legislation might have allowed those driving as a primary occupation to earn higher effective hourly wages, leading to similar yearly earnings with fewer hours of work.