Digital Labor Markets and Global Talent Flows

by John Horton, William R. Kerr, and Christopher Stanton

Overview — Digital labor markets aiInternet-based platforms connecting workers worldwide with companies seeking to have tasks completed. This paper describes the markets, evaluates their rise and global span, and reviews academic studies of how they function. It includes cases to suggest the range of ways in which digital capabilities extend access to talent over long distances.

Author Abstract

Digital labor markets are rapidly expanding and connecting companies and contractors on a global basis. We review the environment in which these markets take root, the micro- and macro-level studies of their operations, their ongoing evolution and recent trends, and perspectives for undertaking research with micro-data from these labor platforms. We undertake new empirical analyses of Upwork data regarding 1) the alignment of micro- and macro-level approaches to disproportionate ethnic-connected exchanges on digital platforms, 2) gravity model analyses of global outsourcing contract flows and their determinants for digital labor markets, and 3) quantification of own- and cross-country elasticities for contract work by wage rate. Digital labor markets are an exciting frontier for global talent flows and are growing rapidly in importance.