The changing global labour market - how a Jesus Fellow is measuring the impact of new digital technologies and online work

Vili Lehdonvirta MSc, PhD is a Hugh Price Fellow at Jesus College, an Associate Professor and Senior Research Fellow at the Oxford Internet Institute and a Fellow of the Alan Turing Institute. Vili is an economic sociologist who examines how digital technologies are shaping the organisation of economic activities in society. He teaches graduate students in the field of Digital Technology and Economic Organisation.

How did you come to be at Jesus College?

I have been a fellow at Jesus College since January 2017 and my office is at the Internet Institute. I have an MSc in Information Networks from Helsinki University of Technology (now Aalto University), and a PhD in Economic Sociology from the Turku School of Economics in Finland. Before coming to Oxford, I worked as a post-doctoral researcher at Helsinki Institute for Information Technology, the University of Tokyo and the London School of Economics, and prior to my academic career, I worked as a game programmer.

Tell us about your recent research

I am currently the principal investigator for the iLabour Project at the Oxford Internet Institute. Funded by the European Research Council , it examines the impact of new digital technologies on worldwide labour markets. Today, we have a situation where an increasing amount of work is done via online platforms but existing labour market statistics are not good at capturing them - this work happens outside of the view of policymakers and researchers. So we created a tool to show this, the Online Labour Index (OLI).

The OLI uses a computational system which reads all the vacancies on the largest online labour platforms including Upwork, Freelancer, Guru, and PeoplePerHour and performs data science magic to calculate the statistics - showing the number of vacancies, prevalence of different occupations, whether the market is growing or shrinking, where the demand is and where the workers are. There is a slight bias as the tool currently only tracks English language platforms, but they do operate globally so it gives a good picture overall. 

Labour market statistics usually look at employment rates, but define employment as being employed to do paid work for at least one hour a week. It is is a binary approach (you are either employed or not employed) but our system captures all work; from people who have a day job but moonlight as freelancers in the evening, to wholly self-employed people who can now access opportunities outside of their local channels. Our system can show how much work there is across global boundaries, where it originates from and where it goes to. We then study the impacts of the changes. All the findings can be seen on our
website.

Why did you choose this topic?

The growth of the online labour market is dramatically transforming the way we work, and the way employment is defined. The role played by the emergence of platforms giving easy access to temporary work from all over the world has huge economic and social policy implications. 

The challenge for policymakers is to manage these transformations in ways that maximise prosperity and employment without deepening inequalities and compromising our core European values. By measuring the gig economy in real time we can understand the scope of this new market and inform the people in charge of making the policies which protect workers, regulate the labour markets and ensure fair taxation.

What impact are you expecting to emerge from your research?

Our project was initially funded by the European Research Council and is due to finish in 2020, but major international organisations have already recognised its importance. We are currently in negotiation with the International Labour Organisation (ILO), who are interested in taking over the Online Labour Index (OLI). The ILO is the branch of the United Nations that proposes global labour regulations, so this shows how our research is already influencing international policymakers. In addition, our data has been used in reports and research by the World Bank, the OECD and various national governments.  

I also regularly travel to Brussels to help policymakers think about the impact of  online platforms on labour market regulations and taxation. I’ve written about some of my policy work in a blog post.

What will you be focusing on next?

I am writing a report for the European Commission, exploring how we can tax platform-based work. Self-employment that happens online has little visibility to tax agencies. Platform companies are not reporting earnings to tax departments because they do not have the means to receive the data, and whether or not the workers declare their income is dependent on their own morals. It is possible that the net revenue loss from undeclared earnings from this sort of work is significant. My report explores ways to address this issue and will be published in early 2020.

Last year I was also appointed to the European Commission’s expert group for the Observatory on the Online Platform Economy, where I lead a workstream that is examining how we can measure the role that multinational online platforms are playing in the European economy, in industries such as hospitality and retail.  

Key players like Amazon, eBay, GooglePlay and Booking.com generate enormous business for suppliers, but we lack reliable statistics on the impact they are having, both in terms of the positives and the potential negatives that might call for some policy intervention. For example, Amazon helps a lot of small European businesses find customers all over the world, but it also has a potentially dominant position in the market. If Amazon delists or downgrades a supplier it will have a catastrophic effect on them, but although there is anecdotal evidence, we need robust data to explore the overall effect on our economy and to consider what fair and effective regulations might be needed.

Welcome to our Meet the Fellows section, where we profile some of our Jesus College Fellows and highlight the fascinating research they are working on. For a full list of Jesus College Fellows and Lecturers, please see here.