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Akash Bhatt @akashbhatt8795.bsky.social · 09/03/2026

I know total employment is endogenous to other political processes (including unionizing), and we should ideally try to have good jobs for a large number of people. But, in the short run, the trade-off exists and our choice has real consequences (4/4)

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Akash Bhatt @akashbhatt8795.bsky.social · 09/03/2026

You can create some employment rents and guarantee good jobs for some people. Or you can choose to maximise total emp, even if individual jobs are not really high-paying - not prima facie sure which is better from a social welfare perspective (3/4)

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Akash Bhatt @akashbhatt8795.bsky.social · 09/03/2026

But more importantly, as I said in the rest of my thread, I still think this is a vexing normative question, esp in developing countries with large supplies of labor (which is the source of my interest in this). (2/4)

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Akash Bhatt @akashbhatt8795.bsky.social · 09/03/2026

No doubt. Firstly, as you say, this research is still important, because it is important for data to show what might be common knowledge for a subset of people. (1/2)

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Akash Bhatt @akashbhatt8795.bsky.social · 09/03/2026

Also, it is not super clear to me in this case why platforms made tipping more difficult in light of the law in Seattle. Seems like it was just to increase resentment against the pay standard - a decidedly underhanded way to do this (4/4)

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Akash Bhatt @akashbhatt8795.bsky.social · 09/03/2026

We have to then decide if we prefer "well-paying" jobs for a few people, or an ok-paying job for more people. Especially relevant in labor surplus economies like India. No clear answer - unless we can drastically increase the number of jobs (3/4)

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Akash Bhatt @akashbhatt8795.bsky.social · 09/03/2026

But that is a difficult decision with no "correct" approach. I think of this in the context of Goa, India, where taxi unions have kept out gig platforms. Probably taxi drivers there make more money, but there are probably also others who are crowded out of these jobs (2/4)

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Akash Bhatt @akashbhatt8795.bsky.social · 09/03/2026

Cool paper and highlights the trade-offs often involved in policy, especially with new employment relationships like in the gig economy. As the author says, the way to actually increase pay for workers is to have barriers to entry (1/4)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

It may or may not be bad. But before we talk about it, we need to understand that many shades of gig work exist, and they might have different regulatory needs (13/13)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

My concern is that our lack of precise language around the nuances of gig work will mean that people will cite this paper (on basis of the title and the abstract) as evidence that all regulation for gig workers is bad (12/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

Of course, surplus can still exist. But it is likely to be much lower if your rates are set by an app that can pretty precisely estimate your reservation wages and is somewhat free from the fairness norms around wage discrimination that would exist in a traditional job (11/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

Uber/Doordash etc are different though. The paper describes one source of surplus as buyers' choice being based on worker characteristics. This "rent" does not exist for Uber drivers - the app just matches you with someone (10/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

What is the issue then - as I said above, most calls for regulation or employee status for gig workers are not talking about these kind of platforms. If the rates are set by the workers themselves, they are basically entrepreneurs just using a platform for finding consumers (9/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

So, what does the paper show - in a market with sellers posting bids (Walrasian auctioneer, anyone?) and buyers having preferences over seller characteristics, there is some surplus that is reduced by taxes. Pretty non-controversial 101 economics - cool to see empirically! (8/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

You would expect such surplus to exist. You would also expect a tax to cause some kind of surplus loss - again, the authors show this with a counterfactual 10 percent tax. Workers are worse off after the regulation, even if all the tax revenue were redistributed (7/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

Coming back to the paper - they don't mention the platform, but it is likely something like UpWork - there are buyers and jobs and bids. The paper builds an interesting model to estimate buyer and consumer surplus from these transactions. And there is substantial surplus (6/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

Now let's consider the case of something like Uber/Doordash. Here, the platform is more powerful - they both decide the rates and match buyers to workers. When people are talking about regulation, it is mostly this they have in mind (but it all gets lumped under "gig work") (5/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

Next, you could also consider something like MTurk - buyers post jobs and a rate. Workers choose whether to work at that rate or not. The platform is again an intermediary only (4/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

Consider a platform like Upwork - buyers post jobs, workers look at these jobs and post job-specific bids, then the buyer decides the match. The platform is just an intermediary. Something like TaskRabbit is not much different - only the bids are more general (3/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

This is a problem with the concept of the "gig economy" - how we define it. Is any freelance work gig work? Let's say we only want to focus on app-based platforms - what most people mean. But that hides variation, both in terms of price-setting and the matching process (2/)

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Akash Bhatt @akashbhatt8795.bsky.social · 13/06/2025

Very interesting paper on gig work. What does it show? That there is substantial surplus in the gig work relationship and proposed regulation of such work would cause a decline in that surplus. However, I think there is one issue (1/)

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