TY - JOUR AU - Agrawal, Ajay AU - Horton, John AU - Lacetera, Nicola AU - Lyons, Elizabeth TI - Digitization and the Contract Labor Market: A Research Agenda JF - National Bureau of Economic Research Working Paper Series VL - No. 19525 PY - 2013 Y2 - October 2013 DO - 10.3386/w19525 UR - http://www.nber.org/papers/w19525 L1 - http://www.nber.org/papers/w19525.pdf N1 - Author contact info: Ajay K. Agrawal Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 CANADA Tel: 416/946-0203 Fax: 416/978-5433 E-Mail: ajay.agrawal@rotman.utoronto.ca John J. Horton Massachusetts Institute of Technology Sloan School of Management 100 Main St Cambridge, MA 02142 E-Mail: john.joseph.horton@gmail.com Nicola Lacetera University of Toronto Institute for Management and Innovation 3359 Mississauga Road, Room KN 235 Mississauga, ON L5L 1C6 CANADA E-Mail: nicola.lacetera@utoronto.ca Elizabeth Lyons School of Global Policy and Strategy University of California, San Diego 9500 Gilman Drive, MC 0519 La Jolla, CA 92093-0519 E-Mail: lizlyons@ucsd.edu M1 - published as Ajay Agrawal, John Horton, Nicola Lacetera, Elizabeth Lyons. "Digitization and the Contract Labor Market: A Research Agenda," in Avi Goldfarb, Shane M. Greenstein, and Catherine E. Tucker, editors, "Economic Analysis of the Digital Economy" University of Chicago Press (2015) M3 - presented at "The Economics of Digitization: An Agenda", June 6-7, 2013 AB - Online contract labor globalizes traditionally local labor markets, with platforms that enable employers, most of whom are in high-income countries, to more easily outsource tasks to contractors, primarily located in low-income countries. This market is growing rapidly; we provide descriptive statistics from one of the leading platforms where the number of hours worked increased 55% from 2011 to 2012, with the 2012 total wage bill just over $360 million. We outline three lines of inquiry in this market setting that are central to the broader digitization research agenda: 1) How will the digitization of this market influence the distribution of economic activity (geographic distribution of work, income distribution, distribution of work across firm boundaries)?; 2) What is the magnitude and nature of information frictions in these digital market settings as reflected by user responses to market design features (allocation of visibility, investments in human capital acquisition, machine-aided recommendations)?; 3) How will the digitization of this market affect social welfare (increased efficiency in matching, production?)? We draw upon economic theory as well as evidence from empirical research on online contract labor markets and other related settings to motivate and contextualize this research agenda. ER -