Law Commons^™

Transaction Cost Economics, Labor Law, And The Gig Economy, Seth C. Oranburg, Liya Palagashvili

Law Faculty Publications

The rapid growth of technology not only is creating innovative goods and services, but it is also altering the workplace and the traditional understanding of relationships between employee and employer. This can be seen today with the rise of the gig economy and alternative work arrangements. Our paper seeks to explain how technology has reduced the transaction costs of contracting in the market. In particular, we identify the innovations that have led to reductions in triangulation, transfer, trust, and measurement costs. These costs are relevant for creating greater exchanges between consumers and labor suppliers and, hence, more work for contractors …