Gig Economy: Is It a Trap or Stepping Stone for the Informal Sector?

Abstract

The informal sector and technology have complex interactions, shaping economic activity, job trends, and social outcomes, especially with the rise of the “gig economy”, in which individuals work on an as-needed basis through online platforms. This article explores several theoretical frameworks, such as modernization theory, dependence theory, structuralist approaches, and post-structuralist viewpoints, and investigates how different frameworks explain the effects of technology on informal economic activity. This article also reviews for comprehending the correlation between the informal sector and technology. Besides that, this article explores the dual nature of the gig economy, examining whether it serves as a trap that perpetuates the vulnerabilities of the informal sector or as a stepping stone toward more excellent economic stability and mobility. Although the gig economy provides opportunities for income generation, skill development, and flexible working conditions, it also presents substantial challenges, such as job insecurity, a lack of benefits, and potential exploitation. This paper also addresses the implications for policy and future research directions by the sustainable development goal (SDG) of fostering sustainable, inclusive, and long-term economic growth, as well as full and productive employment and decent work for all.