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Digitization and the Contract Labor Market: A Research Agenda

In: Economic Analysis of the Digital Economy


  • Ajay Agrawal
  • John Horton
  • Nicola Lacetera
  • Elizabeth Lyons


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, primarily located in low-income countries. This market is growing rapidly; we provide descriptive statistics from one of the leading platforms where the number of hours worked increased 55% from 2011 to 2012, with the 2012 total wage bill just over $360 million. We outline three lines of inquiry in this market setting that are central to the broader digitization research agenda: 1) How will the digitization of this market influence the distribution of economic activity (geographic distribution of work, income distribution, distribution of work across firm boundaries)?; 2) What is the magnitude and nature of information frictions in these digital market settings as reflected by user responses to market design features (allocation of visibility, investments in human capital acquisition, machine-aided recommendations)?; 3) How will the digitization of this market affect social welfare (increased efficiency in matching, production?)? We draw upon economic theory as well as evidence from empirical research on online contract labor markets and other related settings to motivate and contextualize this research agenda.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ajay Agrawal & John Horton & Nicola Lacetera & Elizabeth Lyons, 2015. "Digitization and the Contract Labor Market: A Research Agenda," NBER Chapters,in: Economic Analysis of the Digital Economy, pages 219-250 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:12988

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    References listed on IDEAS

    1. Peter Coles & John Cawley & Phillip B. Levine & Muriel Niederle & Alvin E. Roth & John J. Siegfried, 2010. "The Job Market for New Economists: A Market Design Perspective," Journal of Economic Perspectives, American Economic Association, vol. 24(4), pages 187-206, Fall.
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    Cited by:

    1. Cristiano Codagnone & Federico Biagi & Fabienne Abadie, 2016. "The Passions and the Interests: Unpacking the ‘Sharing Economy’," JRC Working Papers JRC101279, Joint Research Centre (Seville site).
    2. Agrawal, Ajay & Lacetera, Nicola & Lyons, Elizabeth, 2016. "Does standardized information in online markets disproportionately benefit job applicants from less developed countries?," Journal of International Economics, Elsevier, vol. 103(C), pages 1-12.
    3. John Horton & William R. Kerr & Christopher Stanton, 2017. "Digital Labor Markets and Global Talent Flows," NBER Chapters,in: High-Skilled Migration to the United States and its Economic Consequences National Bureau of Economic Research, Inc.
    4. Alex Wood-Doughty, 2016. "Do Employers Learn from Public, Subjective, Performance Reviews?," Working Papers 16-11, NET Institute.
    5. Cristiano Codagnone & Fabienne Abadie & Federico Biagi, 2016. "The Future of Work in the ‘Sharing Economy’. Market Efficiency and Equitable Opportunities or Unfair Precarisation?," JRC Working Papers JRC101280, Joint Research Centre (Seville site).
    6. Elizabeth Lyons, 2016. "The Impact of Job-Specific Training on Short-Term Worker Performance: Evidence from a Field Experiment," Natural Field Experiments 00572, The Field Experiments Website.
    7. Chen, Daniel L. & Horton, John J., 2016. "Are Online Labor Markets Spot Markets for Tasks?: A Field Experiment on the Behavioral Response to Wage Cuts," IAST Working Papers 16-37, Institute for Advanced Study in Toulouse (IAST).
    8. Chen Liang & Yili Hong & Bin Gu, 2016. "Effects of IT-enabled Monitoring on Labor Contracting in Online Platforms: Evidence from a Natural Experiment," Working Papers 16-01, NET Institute.

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes


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