INSEAD’s Stabile: Gig Economy Is Good For Workers’ Mental Health

The California state legislature just passed a bill that would require ride-share companies like Uber and Lyft to treat their drivers as employees rather than independent contractors. But many drivers and the companies themselves have said for years drivers prefer the freedom and flexibility they get from not having to punch the clock.

A recent study by Poets&Quants’ Professor of the Week, Mark Stabile of INSEAD, and a co-author, Bénédicte Apouey of the Paris School of Economics-CNRS, shows that the drivers and companies are largely right: Uber drivers and gig economy workers are generally in better mental health than those who work for others,  mostly because they have more control over their time. 

“Our findings suggest that self and temporary employment, as identified through gig-economy activity, have large positive effects on mental health,” Stabile and Apouey write.” These effects exist for both men and women but are stronger for women and for older workers (ages 40-64).”

A STUDY OF AIRBNB HOSTS, UBER DRIVERS & DELIVEROO WORKERS 

The working paper, “The Effects of Self and Temporary Employment on Mental Health: The role of the Gig Economy in the UK,” was published by INSEAD in May 2019.

The study focused on UK-based Airbnb hosts and drivers for Uber and popular UK-based food delivery service Deliveroo. Stabile and Apouey matched data on individuals’ health and demographics between 2009 and 2016 from the UK’s household study Understanding Society with government data on local employment and information from Google searches related to the gig economy. They then used mental health questions from Understanding Society to study the effect of self- and temporary employment on people’s mental health and well-being.

The percentage of self-employed workers in the U.K. has shot up from 12% of the labor force in 2001 to 15.1% in 2017.  Gig economy workers comprised 4.4% of the labor force or 1.625 million people in the 12 months before the study began, according to the UK government. Some 32% of the gig economy workers viewed their gigs as a source of extra income and a majority—53%–were “satisfied with their gig economy work…, mainly because of the independence and flexibility “the jobs provide, the authors note.

SELF-EMPLOYMENT IS GOOD FOR MENTAL HEALTH

Stabile and his co-author’s findings “suggest that, contrary to some previous studies, self-employment and temporary employment are positively associated with mental health,” they write. They also found “a consistent pattern of improvements” in sleep, physical activity, use of medication, smoking and drinking, all key drivers of mental health.

“We find a strong and significant relationship between self-employment and ability to concentrate, not being constantly under strain, confidence, belief in self-worth, and happiness,” the researchers find. In particular, “the findings here are consistent with the potential benefits of having more control in the job and their effects on mental health,” they write.

Although self-employment is positive for the mental health of both men and women, its effect is much stronger for women and slightly stronger for older workers (age 40-64) than for younger workers (ages 18-39). Also, it has a much stronger effect on workers who don’t have college degrees than for those who do.

CONVENTIONAL WISDOM ON THE GIG ECONOMY MAY BE WRONG

These findings—that workers in the gig economy are happy with their jobs and that many of them, particularly women and older workers, show significantly better mental health, by several measures, than their counterparts who work full time, probably won’t change anti-gig economy laws in California and other places, but it does show that the conventional wisdom on the gig economy may be wrong.

Stabile, 46, is the Stone Chaired Professor of Wealth Inequality and professor of economics at INSEAD and director of the James and Cathleen Stone Centre for the Study of Wealth Inequality. His recent research has focused on inequality, poverty, child health, health care financing, and tax policy. He teaches classes on business and public policy, health care markets and policy.

Having earned his MA and Ph.D. from Columbia University, Stabile has been on the INSEAD faculty since 2015. From the time he got his Ph.D. in 1999 until 2015 he taught at the University of Toronto, where he got his bachelor’s degree.

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