The informal economy forms the backbone of most of developing countries and employs more than 80 percent of the labor force and contributes to more than 50 percent of a country's GDP.  This informal workforce that delivers work on-demand (aka gig work) with little to no formal contracting has been augmented by the emergence of online digital platforms. These digital platforms, while guaranteeing flexible work hours also provide additional work opportunities for gig workers. While much of the work on gig economy has focused on consumer welfare, we focus on worker welfare. Apart from general observations on the gig workers’ interactions in online platform markets, we also provide some insights from exhaustive surveys we conducted with workers in the beauty care and house maintenance services markets in India. The survey included a controlled experimental setup including workers in both online and offline markets across the two mentioned sectors in two different cities in India. From the survey findings, we build an Agent Based Model (ABM), and simulate the labor markets in both sectors. We find that when online platforms deviate from their stipulated incentive schemes to workers as often witnessed in the beauty care market, the unemployment rate increases with a corresponding reduction in the average wage and leisure offered in the market. We also find that the deviation of online platforms in terms of their leisure offering as witnessed in the house maintenance market, has the effect of decreasing the unemployment rate, with corresponding increase in the offered leisure in the market. While regulation of the gig economy is still evolving in most countries, we also model the effect of regulatory intervention on minimum wage and maximum work hours. We find that the regulator’s intervention on minimum wage and leisure increases the offered wage and leisure in the market in the short-run with a decrease in the unemployment rate. However, in the long run, the average wage and leisure decrease and the unemployment rate increases.

V. Sridhar

Sridhar is a professor at the Centre for IT and Public Policy at the International Institute of Information Technology Bangalore (IIIT-B), India. He is the author of three books: The Telecom Revolution in India: Technology, Regulation and Policy (2012), The Dynamics of Spectrum Management: Legacy, Technology, and Economics (2014), and Emerging ICT Policies and Regulations: Roadmap to Digital Economies (2019). He has also edited four books, and his recently edited book titled Data Centric Living: Algorithms, Digitization and Regulation (2021), has just been published by Routledge. He has published many articles in peer-reviewed leading telecom and information systems journals. Sridhar has taught at many institutions in the US, Finland, New Zealand and India. He was also a visiting scholar at Aalto University, Finland and was the recipient of Nokia Visiting Fellowship. He has been a member of Government of India committees on Telecom and IT and also has industry experience in the communication industry. He has written more than 350 articles in prominent business newspapers and magazines relating to telecom regulation and policy in India. He has received funding from different sources, both national and international for his research projects. Sridhar has a PhD from the University of Iowa. His work can be accessed here.

Boxed lunches will be available for “to-go” pickup at the end of the lecture.