Why Do People Choose Freelance Work Arrangements? Evidence From a Randomized Trial

Last registered on May 29, 2024


Trial Information

General Information

Why Do People Choose Freelance Work Arrangements? Evidence From a Randomized Trial
Initial registration date
May 22, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
May 29, 2024, 1:39 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.



Primary Investigator

Carnegie Mellon University

Other Primary Investigator(s)

PI Affiliation
University of Chicago
PI Affiliation
Boston University

Additional Trial Information

On going
Start date
End date
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
A large and growing body of research has documented that a substantial share of individuals in the United States who do work for firms do so as self-employed independent contractors rather than as employees of those firms. The decision to work for a firm (or through a digital platform) as a self-employed contractor rather than as an employee has important ramifications for workers. Unlike employees, independent contractors are not protected by labor law and are not eligible for social insurance programs administered through employers such as workers compensation and unemployment insurance. Further, contractors are often responsible for covering their own expenses, fees, and some taxes usually paid by employers, so that the true take-home earnings from independent contract work may be lower than appears initially. On the other hand, it is often the case that independent contract jobs offer greater flexibility and control over one’s work that is desirable to many participants. A key question for policy debates is whether freelance contractors generally have a good grasp of the tradeoffs involved in contract work and voluntarily choose such arrangements because they value the amenities, or if such arrangements might instead exploit workers’ lack of awareness of the tradeoffs involved to reduce compensation without workers’ awareness. We study this question using a survey experiment designed to disentangle the role of beliefs and salience about the tradeoffs involved in contract work from underlying (and potentially heterogeneous) preferences over amenities like flexibility, control, remote work, and job security, as well as their direct tastes for inherent features of employment (such as legal protections and tax withholding).
External Link(s)

Registration Citation

Garin, Andrew, Dmitri Koustas and Linh Tô. 2024. "Why Do People Choose Freelance Work Arrangements? Evidence From a Randomized Trial." AEA RCT Registry. May 29. https://doi.org/10.1257/rct.13633-1.0
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Experimental Details


Intervention Start Date
Intervention End Date

Primary Outcomes

Primary Outcomes (end points)
Willingness to pay for traditional employment instead of independent contract work; propensity to choose traditional employment
Primary Outcomes (explanation)
See full analysis plan.

Secondary Outcomes

Secondary Outcomes (end points)
Beliefs about net pay relative to gross pay; reported expenses
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We estimate individual-level preferences for traditional employment versus freelance work using the Bayesian Adaptive Choice Experiment (BACE) framework developed in Drake, Payró, Thakral and Tô (2024). We have respondents choose between 18 sequential pairs of jobs. Key to our design is that in each comparison, one job is always a freelance independent contractor job and the other is a traditional employment job Each job is additionally characterized by a pay amount (discussed further below), a degree of control over the performance of one’s job, control over schedule, remote work possibility, the probability the job ends before 1 year—these are varied in each set of options in order to estimate one’s willingness to pay for each job feature separately from a willingness to pay for a W-2 job per se (holding other attributes constant). To fix comparisons, we state that neither job offers health insurance or retirement benefits and that the weekly number of hours are the same in each job, and anchor pay levels to their actual current pay level. We randomize participants into three groups that vary the order of questions asked and the extent of information provided about the distinction between freelance work and traditional employment.
Experimental Design Details
Our RCT randomly assigns respondents into one of three experimental conditions that vary what information is provided about the nature of independent contract arrangements whether the pay amount is presented as a gross amount before taxes and expenses or a net amount after taxes and expenses. In particular, respondents are randomized into three conditions at the beginning of the study:

In a control group, jobs options are described as either 1099 independent contractor jobs or as W-2 employment jobs and list the gross pay before taxes and expenses for each job in the 18 choice pairs. We ask detailed questions about expenses in one’s current job (asking workers who are employees to imagine what it would cost to cover expenses themselves if they had to) after data collection in the discrete choice experiment has concluded.

In a first treatment condition, we ask the same detailed questions about expenses but do so before beginning the pairwise comparisons, and additionally provide information about typical costs of various expense items. We then explicitly highlight key differences in how the law treats employees and contractors (i.e. social insurance, tax responsibility, and legal protections) and provide expected taxes and expenses for sample independent contract and employment jobs with the same gross pay. After conducting a knowledge check and assessing beliefs about net pay, we then direct respondents to make the 18 job comparisons, again presenting gross pay for each option.

In a second treatment condition. We provide the same information about how the law treats employees and contractors as in condition B. We assess beliefs about net pay, but do not provide information about taxes and expenses, nor do we ask questions about expenses until after the discrete choice experiment has concluded (as in the Control condition A). In the discrete choice experiment, however, we present participants with net earnings after taxes and expenses for each option rather than gross pay amounts.

This study is implemented in an extension of the Entrepreneurship in the Population (EPOP) survey conducted by NORC, which is fielded in the AmeriSpeak survey panel. The Qualtrics extension survey was developed in collaboration with the Princeton Survey Research Center and is being administered by NORC.
Randomization Method
Randomization done within Qualtrics.
Randomization Unit
Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters
3000 individuals.
Sample size: planned number of observations
3000 individuals.
Sample size (or number of clusters) by treatment arms
1000 in control, 1000 in treatment arm 1, 1000 in treatment arm 2
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Institutional Review Boards (IRBs)

IRB Name
Princeton University Institutional Review Board
IRB Approval Date
IRB Approval Number
Analysis Plan

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Post Trial Information

Study Withdrawal

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Is the intervention completed?
Data Collection Complete
Data Publication

Data Publication

Is public data available?

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials