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Data-driven research, at its best, presents you with results that surprise you.

When I began studying Seattle's minimum pay standard for delivery drivers, I personally expected to see high-attachment delivery drivers making more money after the policy went into effect. 1/13

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NBER

@nberpubs

Mar 6

Featured in the latest Digest: Impact of Minimum Pay Rules on Gig Delivery Drivers nber.org/digest/202603/

3:48 PM · Mar 9, 2026

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Andy Garin

@andy_garin

11h

Usually, minimum wages at least raise earnings of covered workers, even if there are other tradeoffs. But that's not what my colleagues and I found. We found that deliver drivers in Seattle earned about the *same* after the reform as they did before. 2/

We spent a lot of time digging into the data to see what was going on. Could this have been some issue in how we constructed the data, or how we did our analysis? With a lot of work, it became clear that this *wasn't* a fluke. 3/

We clearly see that base pay per delivery unambiguously rose after the reform. But two other things also happened: 4/

Andy Garin

@andy_garin

11h

Drivers were completing fewer trips per day, even though they seem to be spending the same amount of time on the apps. It looks like drivers have to endure more time and distance off the clock to find tasks to do. 5/

Tip income, which accounts for the *majority* of delivery driver pay and is not covered by pay standards, went down. Some of that was organic as customers faced higher delivery fees, but some was accelerated by apps disabling tipping at checkout in Seattle after the reform. 6/

These results suggest that gig markets differ from standard labor markets in key ways, that create unique challenges for pay regulation. Namely: 7/

In gig markets, unlike "standard" labor markets, there is no distinction between people who are employed and unemployed: *everyone* looking for work queues for delivery tasks, which get distributed across the whole group. 8/

So when higher pay per delivery attracts new drivers to gig work, as customer demand falls due to higher prices, *all* drivers face longer queues for deliveries. 9/

Since there are minimal barriers to entry, any increase in earnings opportunities leads the supply of drivers to rise until the longer queue times roughly offset the benefits of higher pay per delivery. 10/

The punch line: With free entry into gig markets, it is *very* hard to raise anyone's earnings with per-task pay regulation. 11/

Raising pay is possible but probably requires imposing some kind of barrier to entry—remember how the taxi sector used to use medallions and other licensing requirements to ensure high driver pay rates? 12/

Of course, barriers to entry also undermine the flexibility benefits of gig work for workers who need ways to earn extra cash at key moments. Our findings suggest that there is no easy win-win with minimum pay regulations. 13/13

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Ben Glasner

@BenGlasner

Feels like a direct complement to my work on the minimum wage in the non exempt sector and the gig economy.

journals.uchicago.edu

The Minimum Wage, Self-Employment, and the Online Gig Economy | Journal of Labor Economics: Vol 41,...

This paper estimates the effect of minimum wage increases on work that is not covered by minimum wage laws. I find that minimum wage increases in the early 2000s resulted in small reductions in...

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Andy Garin

@andy_garin

Great point—thanks for making that connection!

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Alan Benson

@alanmbenson

Nice, elegant study. You think it's fair to say then that labor supply is very elastic for gig work?

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Andy Garin

@andy_garin

Labor supply *to the delivery sector* is elastic, yes, i.e. no barriers to sectoral mobility

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Door

@DoorBlueArrows

Do you think income targeting could be part of this as well?

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Chris Blattman

@cblatts

18h

For the parents out there, who also receive 18 emails/week from their kids school, where “grades available” is buried beneath “grandparents day” and lunch menu, I bring you my favorite new Claude Code skill: /school-digest claudeblattman.com/workflows/scho

Once more unto the breach, dear coauthors, once more

I just had a paper returned as an incomplete submission. Why? Because it lacked an author contribution statement. It was single-authored and I had written this "There is only a single author so that author did everything." I still don't know how to get it right.

I will never understand people who go to econometric reading group. Econometrics is not supposed to be fun. It is not supposed to involve friends. It is supposed to involve pain, suffering, and staring into the void alone on a hillside before the wrathful gaze of god.

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Henry Shevlin

@dioscuri

18h

I will never understand people who go to fitness classes. Exercise is not supposed to be fun. It is not supposed to involve friends or coffee or a nice studio. It is supposed to involve pain, suffering, and staring into the void alone on a hillside before the wrathful gaze of god

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