One frame on FAI’s research agenda is understanding the role of employment in development. How does employment help people escape from poverty? What kinds of jobs—for instance formal employment, self-employment, casual labor— are best for improving people’s wellbeing, economic and otherwise? What are the characteristics of a “good” job? To understand the choices that people face, we need a clear picture of how different kinds of jobs provide things that people want or need—income of course, but also intangibles like flexibility, structure, dignity, purpose, and satisfaction.
About two years ago, we decided to lend our support (due in turn to a grant from the Mastercard Center for Inclusive Growth) to a study proposed and carried out by Dvara Research on platform labor in India. The “platform” or “gig” economy, which started in wealthier, more digitized economies, was booming everywhere, and attracting a lot of attention. But many fundamental questions remained. Some claim that platforms could be a solution to the rampant unemployment and high friction informal labor markets that predominate in developing countries. Others claim that platforms are a highly efficient means of exploiting workers (and limiting workers’ recourse if they are exploited). Are platforms increasing income stability and predictability or reducing it?
At the start of the study, we kicked around ideas for a blog post with Jonathan Donner of Caribou Digital about what the development and policy communities most still needed to understand about platform labor work, which we boiled down to two areas of inquiry: What is the actual experience of platform workers; and what are the real-world alternatives to platform work? Since then, there’s been quite a lot of work on the topic, helpfully documented on Caribou Digital’s comprehensive site platformllivelihoods.org, that begins to fill in some of the gaps.
The Dvara Research study was published last week and speaks to these questions. Over time, co-authors Rakshith Ponnathpur and Risha Ramachandran argue, a few big platforms have gained a clear upper hand in the labor market, and as a result, “platform workers’ experience with platform work has worsened, earnings reduced, benefits discontinued, while more costs and risks have shifted on their shoulders.” At the same time, the workers feel they have little choice but to continue in the work: “with little to no alternative employment opportunities in sight that can guarantee them comparable earnings, most participants felt platform work was still their best bet to earn a livelihood for the time being.”
The Dvara study uses focus groups and financial diaries to reveal the financial flows and reflections of a small sample of urban, largely male workers in Bangalore, India. Other recent and ongoing research looks at different populations and contexts, and comes to different conclusions (for instance this ongoing study by DFS Lab in Indonesia, which seems to be uncovering positive outcomes related to platform labor participation, particularly for rural populations, young women, and first time entrants to the job market).
At FAI we’re planning a conversation to delve into some of these new findings; to receive an invitation sign up here and stay tuned.