| Abstract |
The decision to work for a firm (or through a digital platform) as a self-employed contractor rather than as an employee has important ramifications for workers. A key question for policy debates is whether workers generally fully grasp the tradeoffs involved in contract work and voluntarily choose such arrangements because they value the amenities, or if such arrangements might instead exploit workers’ lack of awareness of the tradeoffs involved. We shed light on this question through a novel survey experiment design that nests a discrete choice experiment within a randomized intervention information that allows us to disentangle the role of beliefs and salience about the tradeoffs involved in contract work from actual (and potentially heterogeneous) preferences over amenities like flexibility, control, remote work, and job security, as well as their direct tastes for inherent features of employment (such as legal protections and tax withholding). While we find substantial concordance between existing work arrangements and preferences for amenities, we also find that a substantial number of workers choose employee status when the differences across contracts are made more salient, suggesting that efforts to improve transparency could increase worker welfare. |