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Digital Work, Earnings Premiums, and the Gender Gap: Evidence from Pakistan's Labour Force Survey 2024–25

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  • Shoib, Zulekha
  • Lohana, Sneha

Abstract

Digital labor platforms and online work are rapidly growing in Pakistan, yet rigorous empirical evidence on the effect of this growth on Wages is very scarce. This paper uses the recent Labor Force Survey 2024- 2025, the first national dataset to separately identify online and digital workers, to examine three related questions: whether digital work generates a wage premium over traditional employment, whether this premium differs by gender, and the characteristics of individuals to predict entry into digital work. Using Mincer's equation, OLS regression on a restricted sample of 24406 workers, this research estimates a premium for digital work while controlling for age, gender, education, and job characteristics. The findings reveal that the conditional earnings premium is a 6.97%. Heterogeneity analysis across gender shows that digital work does not bridge the gender wage gap, as women face 22.5% earning penalty in both digital and physical work. Platform analysis shows differences in premiums for different kinds of online jobs. The probit model shows that people with higher education, especially those with higher computer qualifications and living in urban areas, have a significant increase in probability of entering and participating in the digital labor market. Overall, the findings suggest that while digital work is associated with higher earnings, its benefits are uneven across workers and types of online employment.

Suggested Citation

  • Shoib, Zulekha & Lohana, Sneha, 2026. "Digital Work, Earnings Premiums, and the Gender Gap: Evidence from Pakistan's Labour Force Survey 2024–25," MPRA Paper 129903, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:129903
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    References listed on IDEAS

    as
    1. Jacob A. Mincer, 1974. "The Human Capital Earnings Function," NBER Chapters, in: Schooling, Experience, and Earnings, pages 83-96, National Bureau of Economic Research, Inc.
    2. Thomas Lemieux, 2006. "Postsecondary Education and Increasing Wage Inequality," American Economic Review, American Economic Association, vol. 96(2), pages 195-199, May.
    3. Thomas Lemieux & W. Bentley MacLeod & Daniel Parent, 2009. "Performance Pay and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 1-49.
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    Keywords

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    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • 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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