The online gig economy is growing „rapidly” and has become an „indisputable part” of the global market as it encourages more inclusive labor force participation, a World Bank study has revealed.
The share of online gig workers in the global labor force ranges from 4.4 percent to 12.5 percent, higher than previously predicted, and holds particular promise for women and youth in developing countries, the Washington-based lender said in its latest report. Work without borders Report.
However, the World Bank acknowledged that there is no reliable data source to estimate the size of the workforce in the gig economy.
Using a combination of mixed methods, data science, proprietary institutional databases, and an Internet survey of 17 countries, the number is between 154 million and 435 million.
Gig work is an important means of earning extra income, as it has become a secondary activity for four out of 10 workers.
Demand for online gig workers has risen faster in developing countries than in developed countries, the report said, citing a survey covering more than 20,000 companies.
Young people – those under 30 – are drawn to gig work because it offers the opportunity to earn income, learn new skills or have the flexibility to combine work with school or other jobs, the study says.
On the other hand, women in most regions participate more in the online gig economy than in the general labor market or services or informal sectors, the study found.
„Online gig work can provide an additional pathway out of poverty for people in low- and middle-income countries,” World Bank Vice President for Human Development Mamata Murthy wrote in a release accompanying the report.
„This can help address youth unemployment and support increased labor market participation for women.
„This can help address disparities in employment opportunities across regions and provide flexibility in hiring talent that is critical to business growth and job creation – for entrepreneurs, start-ups and small businesses.”
The online gig economy can provide opportunities for relatively low-skilled workers and those in areas without enough local jobs, while expanding the talent pool for micro, small and medium enterprises, the World Bank said.
The gig economy is often described as a free market where companies hire freelancers to provide services, particularly ride-hailing and food delivery, to cut costs.
This arrangement benefits both parties. For employers, this reduces human resource costs, while workers can choose the programs they want and switch between multiple careers as long as they are comfortable.
The global gig economy is projected to grow from an estimated $414 billion in 2022 to about $919 billion by 2028, at a compound annual growth rate of 14.2 percent, a study by US data base Industry Research showed this week.
„In the absence of reliable labor market survey data, more research is needed to explore different methods for understanding and monitoring the growth of the gig economy,” the World Bank said.
Despite the growth of the online gig economy, the World Bank has warned of challenges and potential risks.
One of the most obvious barriers is exclusion from opportunities for those without access to the internet and digital devices such as smartphones, laptops and tablets.
Also, in poor countries, most people work outside the scope of labor regulations and lack access to social insurance and benefits.
The report acknowledged that there is still a significant pay gap between men and women, with women earning 68 percent of men’s wages.
Another „surprising finding” is that six out of 10 gig workers live in small towns, pointing to the role online gig work plays in addressing regional disparities in employment opportunities.
„Furthermore, gig jobs are sporadic and do not always provide clear career progression paths for young people, and many spend long periods of time searching for gig jobs,” it said.
Updated: September 09, 2023, 3:30 AM
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