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Economic Analysis of the Digital Economy$
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Avi Goldfarb, Shane M. Greenstein, and Catherine E. Tucker

Print publication date: 2015

Print ISBN-13: 9780226206844

Published to Chicago Scholarship Online: September 2015

DOI: 10.7208/chicago/9780226206981.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 17 October 2021

Digitization and the Contract Labor Market

Digitization and the Contract Labor Market

A Research Agenda

(p.219) 8 Digitization and the Contract Labor Market
Economic Analysis of the Digital Economy

Ajay Agrawal

John Horton

Nicola Lacetera

Elizabeth Lyons

University of Chicago Press

Online contract labor globalizes traditionally local labor markets, with platforms that enable employers, most of whom are in high-income countries, to more easily outsource tasks to contractors, primarilylocated in low-income countries. This market is growing rapidly; we provide descriptive statistics fromone of the leading platforms where the number of hours worked increased 55% from 2011 to 2012, with the2012 total wage bill just over $360 million. We outline three lines of inquiry in this market setting that arecentral to the broader digitization research agenda: 1) How will the digitization of this market influencethe distribution of economic activity (geographic distribution of work, income distribution, distributionof work across firm boundaries)?; 2) What is the magnitude and nature of information frictions inthese digital market settings as reflected by user responses to market design features (allocation ofvisibility, investments in human capital acquisition, machine-aided recommendations)?; 3) How will thedigitization of this market affect social welfare (increased efficiency in matching, production?)? We drawupon economic theory as well as evidence from empirical research on online contract labor markets andother related settings to motivate and contextualize this research agenda.

Keywords:   labor, development, international, digital markets

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