Competition and wage effects in the global online market for microwork and services outsourcing

A new form of service outsourcing has emerged, namely the global online job marketplace for freelance contractors. Such platforms are currently the closest proxy to the idea of a global labor market. In this chapter, we examine how competition manifests itself on one such global online platform, namely oDesk. We present a comparative analysis of the relative wages and the rewarding of skills and expertise of contractors from selected countries in the Global North and South. We find that wage convergence takes place but that experience and skills hardly translate into better remuneration. While online service outsourcing provides new employment opportunities for freelancers around the world, the intense competition and the inherent restrictions of this model limit the financial gains for most of them.