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How does tax affect the incentives to work?

OPPORTUNITY COST

The opportunity cost of being an influencer

In the first in a new series of Economic Review columns looking at the concept of opportunity cost, Sofia Izquierdo Sanchez considers the trade-offs made by social media influencers

Influencer holding phone with a foreground of emojis.
© Rawpixel.com/stock.adobe.com

Influencers are a relatively new phenomenon on the social media scene, but their appeal is massive. A survey by CNBC in 2023 revealed that 57% of Generation Z social media users would consider becoming an influencer if given the opportunity. It is not hard to see why, given the lure of apparently easy fame, free products, travel and a flexible lifestyle.

However, there is more to the influencer life than perhaps meets the eye. To stay relevant, influencers must constantly create engaging content to grow their follower numbers and maintain interest. Brands only sponsor those who are trending, which directly affects an influencer’s ability to monetise their content. This pressure to stay relevant can have serious consequences. If you are seeking viral fame, you may need to sacrifice privacy, personal relationships, mental and physical wellbeing, or long-term career prospects in other sectors.

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How does tax affect the incentives to work?

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