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Participation and Losses in Multi-Level Marketing: Evidence from an FTC Settlement

Bäckman, Claes LU and Hanspal, Tobin (2018) In Working Papers
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 flexible work. However, losses are correlated with higher inequality and lower social capital, suggesting that the pitfalls accrue to vulnerable groups.
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author
and
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
keywords
Multi-level marketing, Alternative work, Consumer financial protection, J21, J22, L26
in
Working Papers
issue
2018:13
pages
29 pages
language
English
LU publication?
yes
id
49e1fa9a-57c0-407b-9662-c2f325196ac5
date added to LUP
2018-06-05 10:43:24
date last changed
2025-04-04 13:57:25
@misc{49e1fa9a-57c0-407b-9662-c2f325196ac5,
  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 flexible work. However, losses are correlated with higher inequality and lower social capital, suggesting that the pitfalls accrue to vulnerable groups.}},
  author       = {{Bäckman, Claes and Hanspal, Tobin}},
  keywords     = {{Multi-level marketing; Alternative work; Consumer financial protection; J21; J22; L26}},
  language     = {{eng}},
  note         = {{Working Paper}},
  number       = {{2018:13}},
  series       = {{Working Papers}},
  title        = {{Participation and Losses in Multi-Level Marketing: Evidence from an FTC Settlement}},
  url          = {{https://lup.lub.lu.se/search/files/199642227/WP18_13.pdf}},
  year         = {{2018}},
}