Role of the Gig Economy in Developed and Developing Economies: What Is and Has Been the Impact of This Sector on Economic Mobility and Contribution to the Country's GDP? A Case Study of India and the USA

Abstract

This paper compares the gig economy in India and the United States, using NITI Aayog household surveys and IRS tax records respectively. Both sectors grew quickly through the 2010s. India's gig workforce rose from 2.52 million in 2011–12 to 6.80 million in 2019–20, with 23.5 million projected by 2029–30, while American platform work reached about one per cent of the workforce by 2016 and five million workers by 2021. The similarity ends there. India's micro, small and medium enterprises have not created jobs fast enough to absorb new entrants to the workforce, and the gig sector has employed the remainder. American platforms, by contrast, grew alongside a labour market already operating near full employment, although even there 49 per cent of participants had no other job. In the United States, platform work is a second income earned alongside a first job that carries health cover and unemployment insurance. In India, it is informal work for 82.5 per cent of those engaged in it. Neither country measures this sector's contribution to GDP, primarily because it escapes regulation, and because both countries have built their statistics and labour laws around formal employment relationships.