Participation and losses in multi-level marketing: Evidence from an FTC settlement

Claes Bäckman and Tobin Hanspal

No 207, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: More than 20 million Americans are affiliated with Multi-Level Marketing firms (MLMs), but there is little empirical evidence on who participates in this controversial part of today's labor market. We link data on 350,000 individuals cited in an FTC settlement with one of the largest MLMs to detailed county-level information. We find that participation is greater in areas with higher median income and where women are absent from the labor market, suggesting value in exible work. However, losses are correlated with higher inequality and lower social capital, suggesting that the pitfalls accrue to vulnerable groups.

Keywords: Multi-level marketing; Alternative work; Consumer nancial protection (search for similar items in EconPapers)
Date: 2019, Revised 2019
New Economics Papers: this item is included in nep-hrm
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Participation and Losses in Multi-Level Marketing: Evidence from an FTC Settlement (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:207

DOI: 10.2139/ssrn.3175871

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