Sharing my place: the local labor market impact of the P2P technology shock

The emergence of new digital business models, often called peer-to-peer (P2P) marketplaces, is transforming the accommodation industry. While its implications go beyond the industry, our knowledge of its aggregate impact is limited. This paper examines the effects of the P2P irruption on the local labor markets in Spain between 2016 and 2020. We exploit exogenous regulatory changes in short-term rentals (STRs) across different municipalities and periods to investigate the employment outcomes and job reallocation patterns in response to the P2P technology shock. We find that the growing penetration of P2P platforms has a significant positive effect on local job creation and reduction of unemployment, while also promoting long-term labor contracts. Notably, the magnitude of these employment gains varies based on specific municipality characteristics. For instance, smaller localities and those with less tourism activity experience more substantial employment gains, highlighting the relative strength of the creative destruction mechanisms at play. The P2P technology shock also produced a reallocation of resources across industries being complementary to other services, construction, and manufacturing, and substitute to agriculture.