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Beyond 9-To-5: Explaining Earnings Differentials in Nonstandard Work Across Demographics and Work Type
Abstract
While income disparities and earning potential across groups have been extensively studied in the formal labor market, far less is known about how returns are distributed within the nonstandard economy (defined here as income earned through freelance or gig work, short-term rentals, or the sale of goods outside standard employment relationships). Using data from the Survey of Household Economics and Decisionmaking (SHED), we construct an approximation of earnings from nonstandard work by combining information on total household income and the share of income derived from nonstandard activities. We examine whether returns from nonstandard work vary systematically by the extent and type of engagement, sociodemographic characteristics, and attitudes toward financial risk. We find that higher returns from nonstandard work are significantly associated with spending at least 20 hours per week on these activities, engaging in gig or freelance work, offering short-term rentals, holding a college degree, being married, living in communities with favorable economic conditions, and expressing a willingness to take financial risks. In contrast, individuals who identify as Hispanic and those who voluntarily left a job in the past year experience lower average returns from nonstandard work. Taken together, these findings show that returns in the nonstandard economy are stratified in ways that mirror and may reproduce certain broader socioeconomic inequalities. At the same time, we find no evidence in our sample of nonstandard workers of several well-documented disparities observed in the formal labor market, including income differences by gender, by age, or between Black and White workers. Nor do we find difference between rural/urban workers. This research contributes to sociological understandings of labor markets by highlighting how resources, social position, and risk tolerance shape earning potential beyond the boundaries of standard employment.
