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

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.