Cutting wages to break in: How information gaps hold back workers in the online gig economy
Many inexperienced online freelancers from lower-income countries struggle to secure jobs due to limited visibility and unknown skills. This study finds that offering lower initial wages helps attract employers, especially when workers receive feedback about their performance, with high performers benefiting the most from this strategy.
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Ahmed-Tirmazee-Wu-Policy-Brief-September-2025.pdf
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- Millions of workers from lower-income countries seek digital job opportunities through online freelancing platforms; yet, many struggle to find work as their abilities are unknown to foreign employers.
- This study examines whether inexperienced workers can break into the market by offering lower wages initially to attract employers and demonstrate their abilities.
- The randomised controlled trial with employers shows that lower wage offers by new workers increase both the visibility of their applications and the likelihood of being contacted.
- The randomised controlled trial with workers shows that many under-adopt this strategy because they lack accurate information about their own skills and about employer preferences.
- High-performing workers are more likely to adopt this strategy than low-performing workers when given feedback about their performance. They benefit the most from offering lower prices initially to build a reputation and grow in this market.