Digital Adoption, Labor Demand, and Worker Earnings: Evidence from Online Delivery
Author:
Posted: 10 March 2026
Abstract
This paper studies how firm adoption of digital technologies reshapes labor demand and worker earnings. Linking administrative employer-employee records to restaurants and workers from a major delivery platform and using a matched event-study, I show that adopting restaurants substitute in-house labor hours one-for-one with outsourced platform-worker hours. Earnings losses for incumbent workers are modest because displaced workers reallocate to new formal-sector jobs. Exposed non-adopting restaurants are more likely to close, and their workers experience larger losses. I quantify earnings effects across restaurant and platform workers, showing how platform adoption redistributes earnings across workers and creates income outside traditional restaurant employment.