Platform work as a consequence of welfare regime performance

Abstract

In this paper we focus on the impact of welfare institutions on the supply of platform workers. We assume that at the individual level the decision to engage or not in platform work depends on the available alternatives. As a result, we hypothesize that individual decisions can be explained as a consequence of welfare regime performance. In particular, we consider the ability of a welfare regime to: (1) provide effective protection against poverty; (2) to allow parents to reconcile work and family life; and (3) to facilitate a smooth transition from education to employment. Our general hypothesis is that failures in reaching one or more of these policy objectives will make participation in the platform economy more attractive, and hence increase the supply of workers. Empirically, we test our hypotheses both on macro- and micro-level data. We start by testing our macro-level hypotheses on a sample of 21 countries using two datasets on platform work (ETUI IPWS and COLLEEM II). At the micro-level, we use data on Germany and Spain. We find limited evidence in favour of our hypotheses. Higher rates of economic insecurity are associated with a stronger prevalence of platform work. At the macro-level, we also find support for the hypothesis that platform work is a response to the failure of supporting parents in reconciling work and family life. It also appears that online platform work may be an attractive option for tertiary educated people in countries with a strong labour market mismatch (e.g. Spain).