Future of Work in the Global South: Digital Labor, New Opportunities and Challenges

Abstract

Increases in access to Internet have led to the emergence of a new world of work, with an important potential of gig work to contribute in significant ways to marginalized populations in the Global South, especially in contexts of high unemployment rates, informality, less secure forms of employment and limited opportunities. Despite the potential benefits that can be derived from digital labor platforms as an alternative to find and perform income-generating activities, there are several barriers for populations of developing countries to take advantage of this global resource. In this context, we characterize digital workers of the Global South, with special attention to gender aspects and social inequalities; we also estimate the main determinants of entry decisions to digital labor markets (by gender), as well as the main determinants that explain pay gaps between men and women (gender pay gap) and between women that participate and women that do not participate in the digital labor market. We find that inequality of opportunities related to gender is also present in the digital world (digital divide) and that this inequality goes beyond the access barrier. Observable characteristics (such as having a computer, labor experience, and education) in women and men only explain 6% of the gender pay gap, leaving a space of unexplained effects that the literature generally attributes to discrimination. Finally, our results show a positive impact of working through digital platforms over income levels and potential income gains for women. Nevertheless, the income premium for working over digital platforms is 16% higher for women, but the potential gains for women are 14% less than the income gains for men.