The Effects of Self and Temporary Employment on Mental Health: The Role of the Gig Economy in the UK

Abstract

While the spread of digital technologies and the growth of associated atypical forms of work are attracting increasing attention, little is known about the impact of these new forms of work on well-being. This paper examines the effect of Uber diffusion on several dimensions of mental health among UK workers, taking advantage of the rollout of Uber across UK regions. We match individual-level information on health and sociodemographic characteristics from the UK Household Longitudinal Study (Understanding Society) between 2009 and 2019 with data on the diffusion of Uber across the country. We first show that self-employment expands in the “transportation” occupational category after Uber’s introduction. We then find that Uber diffusion is positively associated with mental health, as measured by the General Health Questionnaire, in the population group of self-employed drivers. We argue that this positive correlation captures a selection effect (generated by individuals who become self-employed drivers after Uber introduction) and the omission of unobserved factors, rather than a causal effect. Indeed, we do not observe any improvement in mental health for workers who were already self-employed drivers before Uber entry. In parallel with this, among workers who remained wage-employed drivers over time, we find a decline in mental health after Uber introduction, probably because they feel the competition from Uber drivers.