What we’re reading about how the online gig economy is transforming work

Over the past decade, technology has fundamentally shifted traditional work patterns, creating new ways in which work is contracted, performed, managed, scheduled, and paid. New business models, such as digital platform firms, can foster job creation and bring economic opportunities to millions of people who do not live in industrial areas. Digital platforms are mediating new forms of work, known as online gig jobs, which match workers and clients for tasks that are performed fully online. 

The recent World Bank report, “Working Without Borders: The Promise and Peril of Online Gig Work,” employs an innovative mix of data science methods, website traffic data, and surveys across 17 countries conducted in 12 languages. The study examines the size, scale, and patterns of online gig work in developing countries and provides recommendations for practitioners to design policies and operations to harness the potential of online gig work.

According to the report, online gig work is gaining prominence in the job market. Currently, it accounts for up 12% of the global labor force, with over 400 million workers. This new form of work has brought opportunities, especially for youth, women, and vulnerable populations to learn new skills and earn supplemental income especially during periods of shock.

The report finds that a majority of online gig workers are under 30 years old, drawn to gig work for income generation, skill acquisition, or the flexibility to combine it with education or other forms of employment. Moreover, online gig work contributes to closing the gender gap, as women in most regions participate more actively in the online gig economy compared to the general labor market, the services sector, or the informal sector. Women especially value the flexibility of online gig work to help overcome constraints in accessing the traditional labor market.

Remarkably, nearly three-quarters of these platforms operate at the regional or local level. They perform a crucial, albeit less recognized, role in local labor markets by lowering entry barriers and promoting local private sector development while enhancing inclusion, especially in non-English speaking countries. Surprisingly, six out of 10 online gig workers reside in smaller towns and villages rather than major urban centers, highlighting an opportunity for policymakers to address regional job disparities in areas that often lack sufficient local employment.

However, these new opportunities also usher in policy challenges. Despite the promise of online gig work, a large majority of workers lack comprehensive social protection. Governments can respond by exploring innovative partnership models with online gig platforms to enhance the visibility of informal workers and extending social protection coverage to encompass all workers, including those engaged in gig work. Novel models of collective bargaining are needed to support workers engaged in nonstandard forms of work, and digital technology may help provide innovative solutions.

Featured studies

• Check out the full report of Working Without Borders, a video, and key findings in Arabic, Chinese, English, French, Russian, and Spanish. (Datta et al., World Bank, September 2023)
• A new report surveys online web-based and location-based platforms and provides recommendations to ensure that all platform work is decent work. (ILO, February 2021)
• While there has been a significant increase in registered online workers since 2015, they remain distributed thinly across countries and sectors. (Kässi et al., Open Research Europe, October 2021)
• Most platforms fall short of meeting basic standards of fair work. (Fairwork, July 2023)
• While women are more likely to approach platform work as a long-term income source, platforms providers often overlook barriers women face. (Deshpande et al., CGAP, May 2022)

Essential readings

• This report identifies factors driving demand in various categories of digital work, providing recommendations for gender-inclusive digital job programs for youth. (S4YE, World Bank, September 2018)
• Digital technology is changing how people work and the terms on which they work. (World Bank, 2019)
• While digital labor platforms that intermediate similar services often adopt comparable business models, there can be notable variations in working conditions. (Valet, Sauer & Tolsma, July 2021)
• Nine innovative employment forms within the 27 EU member states, along with Norway and the UK, are identified in this study. (Mandl, Eurofound, December 2020)

Broader jobs agenda

• A new survey in Vietnam categorizes skills into various groups, offering interpretable measures of skill and task importance. (Granata et al., World Bank, September 2023)
• Iraq's informal sector plays a crucial role in its employment landscape, reflected in a framework called "Protect – Promote – Enforce." (Moosa et al., World Bank, May 2023)
• Internal and external shocks on Myanmar's economy and workforce since 2020 reduced employment, especially for women, and quality and wages have declined. (World Bank, May 2023)
• This report assesses Togo's employment challenges and trends. (Karlen & Rother, World Bank, August 2023)
• On average, employment shares in 16 European countries from 2011 to 2019 increased in occupations more exposed to AI, especially those with more younger and skilled workers. (Albanesi et al., National Bureau of Economic Research, July 2023)
• Examining the potential global exposure of occupations to generative AI, a recent report suggests that the primary effect will be augmentation rather than automation of jobs. (ILO, August 2023)

This blog is based on the September 2023 edition of the Knowledge4Jobs newsletter, curated by the World Bank’s Jobs Group and Labor and Skills Global Solutions Group. Click here to sign up for the Knowledge4Jobs newsletter.

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