Shift researcher, Gonçalo Costa, participated in the 2026 American Economic Association (AEA) Annual Meeting held from January 3-5, in Philadelphia, PA, where he presented the following paper:
“Franchising and Labor Standards Compliance in the Fast-Food Industry”
Authors: Gonçalo Costa, Daniel Schneider, and David Weil
This paper documents how franchising systematically delivers worse job quality across wages and fringe benefits. Since the 1980s, firms have shared less of their rents with workers, and fissured workplace arrangements, like outsourcing and franchising, have pushed lower-income workers into lower-paying, lower-quality jobs. This paper shows that franchised fast-food restaurants systematically offer worse job quality than non-franchised ones: wages are about $1.70/hour lower and an overall job-quality index is 0.75 SD lower. Paid Sick Leave (PSL) laws narrowed the franchise–non-franchise gap in sick leave access by 26 percentage points, but noncompliance remains widespread, with over 60% of workers in franchised establishments still denied their legal right to PSL.
