Laid-off employees turning to the gig economy can avoid traditional stopgaps like consumer credit, according to a blog post written by the Kelley School of Business at Indiana University Bloomington.

In a paper published in the Journal of Financial Economics, researchers matched anonymized data from credit profiles with unemployment insurance and found that laid-off Americans with access to Uber as a source of income were less reliant on household debt. They also experienced fewer debt payment delinquencies and were less likely to apply for unemployment insurance benefits.

Lower reliance on credit and insurance enables workers to avoid potential negative consequences, such as over-borrowing that can lead to a debt trap and reduced motivation to work due to dependence on unemployment insurance programs, according to the research.

“Anecdotal evidence from recent government shutdowns suggests many income-shocked workers view the gig economy as a short-term solution to buffer consumption,” co-wrote Ankit Kalda, associate professor of finance and the Jerome Bess Faculty Fellow at the Indiana University Kelley School of Business.

“The effects of Uber’s entry are stronger in states with less generous unemployment insurance benefits. This is consistent with workers weighing the tradeoff between two short-term options, the gig economy and unemployment insurance.”

The researchers matched data from Equifax with information about Uber’s introduction into various markets across the country between June 2012 and February 2016. They found that workers with access to ridesharing opportunities saw a relative decrease in total outstanding credit balances of $689, or 0.9%, compared with those who did not. Delinquency rates also fell by 4.9%.

Eligible car owners were 3.3% less likely to lean on unemployment insurance programs where Uber was present. Following Uber’s entry into a market, workers with access to the ridesharing platform were 4.8% less likely to receive unemployment benefits.

“Back-of-the-envelope calculations suggest that the decrease in unemployment usage resulted in a yearly reduction of between $492 million and $750 million in unemployment benefits distributed by government agencies,” Kalda said.

Using a comprehensive set of Uber product launch dates and employee-level data on job separations, the research found that laid-off workers with access to Uber are less likely to rely on untapped credit. Following Uber’s entry into a market, workers with access to the ride-sharing platform experience a relative decrease in total outstanding balances of $689, or 0.9% of the average individual’s debt burden.

The effects of the ride-sharing platform also extend to credit performance, with workers experiencing a relative decrease in delinquencies of 4.9%.

“To the extent that credit delinquencies are associated with negative welfare implications, this result is consistent with a transition towards gig-based labor supply that allows some laid-off workers to avoid costs associated with job loss,” the research states.