The Gig Economy and Labor Market Restructuring: Platform Work, Worker Classification, and the Future of Employment Relations

Abstract

This study examines the growth, characteristics, and labor market implications of platform mediated gig work across 24 OECD countries from 2015 to 2025. Using administrative data, labor force surveys, and platform transaction records, we document that gig work has grown to represent 4.2% of total employment and 12.8% of labor income for participants. We find substantial heterogeneity in worker experiences: approximately 35% of gig workers use platforms as primary income sources with limited alternative opportunities, while 65% engage in platform work as supplementary income alongside traditional employment or education. Earnings analysis reveals that median hourly compensation after accounting for expenses and unpaid time averages $14.20, approximately 22% below comparable traditional employment, though top decile earners achieve premium wages. Worker classification reforms significantly affect platform labor markets: jurisdictions implementing employee classification requirements experience 18% reductions in platform labor supply but 31% increases in hourly compensation for remaining workers. Social protection gaps remain substantial, with only 23% of gig workers reporting access to employer provided health insurance and 12% participating in retirement savings programs. The findings suggest that gig economy expansion reflects both genuine labor market innovation enabling flexibility and cost shifting from firms to workers that policy intervention may appropriately address.