The rise of the gig economy – captured in new research

Gig economy, on the rise but how do you measure it?

Employers in the US are the number one users of the online gig economy but UK employers are fast catching up.

That’s according to researchers from the University of Oxford who have constructed an Online Labour Index to measure the gig economy.

The US is one of the biggest users of online platforms for hiring freelance workers, says the index, with 52% of all vacancies posted using such sites. However, it’s followed by Britain at 6.3%, India at 5.9%, and Australia at 5.7%.

Oxford University researchers Professor Vili Lehdonvirta and Dr Otto Kässi, who constructed the index, have already gathered a wealth of data on the online gig economy from sites and apps across the world between May-September 2016.

“Labour markets are in the midst of a dramatic transformation, where standard employment is being increasingly supplemented or replaced by temporary freelancers who are recruited online,” says Professor Lehdonvirta.

“Companies and entrepreneurs are using these platforms to find, hire, supervise, and pay workers on a project, piece-rate, or hourly basis. This “on-demand” economy has deep and wide-ranging implications.”

However, while labour markets are undergoing a digital transformation, the quantitative impact of the shift is still largely invisible to public policy makers and researchers. This is because the typical ways of measuring the employment market are not suited to gathering data on work that is only transacted via online channels, say the researchers.

The index shows that between May and September 2016, the number of vacancies grew by 9%, representing an annual growth rate of 25%. The growth was fastest among UK employers, who increased the amount of labour bought online over the period by nearly 14%, with a 7.5% rise elsewhere in Europe and 6% in the US.

Professor Lehdonvirta says: ‘These are striking figures when they are contrasted with growth rates in conventional labour markets, which remain stagnant in the UK and US according to latest national statistics. Yet, this burgeoning online economy has been largely unobserved and is missing from conventional labour market statistics.”

The Online Labour Index will be publicly launched at the Oxford Internet Institute’s conference, The Internet, Politics, and Policy, on Thursday and Friday, 22-23 September. Professor Lehdonvirta and Dr Kässi will be making a presentation based on their paper, titled Online Labour Index: Measuring the Online Gig Economy for Policy and Research.

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