WASHINGON, September 7, 2023“The gig economy represents up to 12% of the global labor market – far more than previously estimated – and is particularly promising for women and young people in developing countries. Demand for online gig work is growing rapidly, but social protections for workers in this segment are still lacking, according to a new World Bank report.
While developed countries currently dominate demand for gig workers, the report: Working without borders: the promise and peril of online on-demand work, found that demand in developing countries is growing at a much faster rate. For example, in sub-Saharan Africa, job postings on the largest digital platform increased by 130 percent, while the growth rate in North America was only 14 percent. And nearly 60% of companies surveyed in poorer countries reported increased outsourcing to gig workers. In richer countries, less than half say the same thing.
Unlike previous studies, the report included local and regional platforms, not just global platforms. And this has extended beyond those who work only in English. As a result, the report reveals that the gig economy is vast, with a total of 545 online job platforms across the world, with workers and clients located in 186 countries. Interestingly, almost three-quarters of the platforms are regional or local rather than global. And highlighting the importance of this sector for developing countries, the report reveals that together, low- and middle-income countries account for 40% of traffic to concert platforms.
“Online gig work could offer people in low- and middle-income countries an additional route out of poverty.,” said Mamta Murthi, Vice President for Human Development, World Bank. “It can help combat youth unemployment and encourage increased participation of women in the labor market. It can also help reduce inequality in employment opportunities between regions and, for entrepreneurs, startups and small businesses, it can provide flexibility in hiring talent essential to business growth and to job creation..”
The report finds that young people are attracted to gig work to earn income, learn new skills or have the opportunity to combine work, school or other employment. It points out that women participate more in the online gig economy than in the general labor market and that six in ten workers live in small towns, outside the largest population centers.
However, the report also warns of potential dangers. In low-income countries, most people work outside the scope of labor regulations and do not have access to insurance and social benefits. And a sizable pay gap still exists, with women earning just 68 percent of men’s wages on one of the major online platforms examined. The report presents recommendations for policymakers to help them realize the potential while limiting the associated risks.
“Digital platforms can help increase the visibility of informal workers, supporting efforts to expand social protection coverage for all.,” said Namita Datta, lead author and program manager, Solutions for Youth Employment (S4YE)world Bank. “By investing in digital infrastructure, partnering with digital platforms to provide support and training to workers, and experimenting with new social insurance and collective bargaining models, developing countries can take advantage of this part growing labor market to create more opportunities and develop their economy. inclusiveness and increase the prosperity of their people.
For more information, including a copy of the new report, visit Working without borders: the promise and peril of online on-demand work Or www.worldbank.org/gig
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