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Multi-Level Marketing as “Gig” Work: Worker Motivations, Characteristics, and Outcomes in the U.S.

In: Journal of Labor and Society
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  • 1 School of Social Work, University of Minnesota, Twin Cities, 1404 Gortner Avenue, Falcon Heights, MN 55108, USA, Corresponding author, e-mail: mdeliema@umn.edu
  • | 2 Department of Economics, Hamline University, 1536 Hewitt Avenue, St Paul, MN 55104, USA, sbosley@hamline.edu
  • | 3 AARP Washington, 18000 International Boulevard, SeaTac, WA 98188, USA, dshadel@aarp.org
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Abstract

Multi-level marketing (mlm) firms offer recruits the opportunity to earn compensation through starting their own direct selling business and often characterize mlm work as part of the “gig” economy. mlm promotes flexibility, autonomy, and income potential but data suggest that most participants fail to make money. Decisions are made under uncertainty as there is asymmetric information on potential outcomes and their respective likelihood. We use the first nationally representative survey (N = 1016) to understand the motivations for participating in mlm “gigs,” the social and financial outcomes of participation, and the correlates of those outcomes. While approximately three-fourths of mlm workers report that they joined for financial returns, a similar share reported that they did not earn any profit. Results identify a mismatch between expectations and outcomes and underscore decision biases in the context of uncertain financial rewards alongside broader gig economy regulatory concerns.

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