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  5. New Gig Work or Changes in Reporting? Understanding Self-Employment Trends in Tax Data

American Economic Journal:
Applied Economics

ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)

New Gig Work or Changes in Reporting? Understanding Self-Employment Trends in Tax Data

  • Andrew Garin
  • Emilie Jackson
  • Dmitri Koustas
American Economic Journal: Applied Economics (Forthcoming)

Abstract

We show that increases in the share of workers reporting self employment to the IRS are not associated with changes in firm-reported payments to "gig'' and other contract workers after 2005 but are driven primarily by self-reported earnings of individuals in the EITC phase-in range. We examine a regression discontinuity design that generates exogenous variation in tax rates at the end of the year after labor supply decisions are already sunk and find tax code incentives increase self-employment reporting conditional on actual labor supply. We show that reporting effects have grown over time as knowledge of the tax code spreads.

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