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Meet the researcher: Johanna Peetz & Jennifer Robson

Posted on March 27, 2019

Selected for the TFI long-term research grant: Johanna Peetz and Jennifer Robson! In their research, they will investigate the financial and psychological consequences of swings in monthly income due to gig employment. Read more about the researchers, their project and why they applied for the TFI research grant here!

Approximately one in six workers is self-employed and one in eight is on a temporary contract (OECD, 2019). Compared to traditional salaried workers, the month to month incomes of self-employed and gig workers may be more unpredictable. Recent research suggests that swings in monthly income is linked to lower savings, more missed bill payments and less financial knowledge. We think that the effects of gig employment on financial outcomes may depend in part on whether workers feel that swings in their income are within their own control. While some gig workers rely on a third-party agency to arrange work opportunities, independent contractors or self-employed workers may have more control in negotiating their availability to work.

In this research project, we will investigate whether income volatility is associated with particular financial outcomes (e.g., savings and financial capability) and psychological outcomes (e.g., work-life balance and experience of stress). Furthermore, we will test how these effects are shaped by the degree of control individuals have over their income. We propose that controllable (endogenous) volatility might have positive effects on financial and psychological outcomes, whereas uncontrollable (exogenous) volatility might be negatively linked to these outcomes. We will examine these hypotheses using anonymized ING data, local community data, and through a lab experiment with which we aim to replicate the effects of income volatility for different forms of gig employment.

By differentiating between different types of volatility – and the psychological and behavioral responses to each – we can better address the needs of the diverse population of gig workers. The outcomes of this research will lay the basis for interventions to empower those with volatile incomes to gain more control over their financial lives. All in all, this study will have implications for the design and delivery of financial services as well as of social protection through welfare systems.

“We were surprised to find that the way people’s income is structured predicts financial choices better than the total amount of income.”

What was your motivation to apply for the Think Forward Initiative research grant?

We strongly support the mission of the Think Forward Initiative, to help people make better choices. Both of us are especially interested in helping individuals have better day-to day financial decisions and outcomes. When looking at financial choices such as whether people signed up for retirement savings in our previous research, we were surprised to find that the way people’s income was structured (whether income changed from month to month or whether it was stable month to month) predicted these financial choices better than the total amount of income. The TFI call for research proposals caught our attention in particular because the call identified gig work as an area of interest. Gig work and self-employment are the main income profiles where income likely varies from month to month, so our research interests matched very well with this specific area of interest to TFI.

How do you expect that your research will contribute to people’s financial well-being?

We hope that our research will start a discussion about how people are paid (in addition to how much they are paid) as an important factor in financial well-being. The academic and applied literature on gig workers is scarce. Individual workers, employers, financial institutions and governments need better information on how volatile incomes affect financial decisions and outcomes. Better evidence will support better advice, financial and social services and public policy as gig employment becomes a larger and more important share of the labour market. We also hope that this research will lay the basis for interventions to empower individuals with volatile incomes to gain more control over their financial lives.

Johanna Peetz is an Associate Professor at Carleton University, Ottawa, Canada. She holds a PhD in Social Psychology from Wilfrid Laurier University, Waterloo, Canada and previously worked as Assistant Professor at the University of Cologne, Germany. Her research interests include individuals’ perception of time, decision making, and social cognition. Her research has been published in internationally recognized journals such as Journal of Personality and Social Psychology, and Journal of Judgment and Decision Making.

Jennifer Robson is an Associate Professor at Carleton University, Ottawa, Canada. She holds a PhD in Public Policy and previously worked as Director of Policy for a national non-profit organisation SEDI (now called Prosper Canada). Her research interests include social and tax policy, poverty in Canada and financial inclusion and household decision-making. She has published in Canadian and international journals and has advised Canadian governments on policy related to personal income tax, childcare, education savings and poverty reduction.