The impact of Covid-19 on Gig economy

Abstract

Covid-19 has jolted and halted the whole world. Economies and stock markets have been hit hard however very little is known about the impact of the pandemic on Gig economy. So, this study is an attempt to understand the impact of Covid-19 on Gig economy. The Online Labor Index of Oxford University has been used as a measure of Gig Economy and daily record of new cases and deaths of Corona patients has been used as proxies for Covid-19. The world data for Gig economy ranges from July 1, 2019 to June 22, 2020 and the data regarding Covid-19 ranges from December 31, 2019 to June 22, 2020. This study uses GARCH and VAR model to understand the above mentioned relationship. The results of volatility clustering shows that the volatility of Gig economy increased with the news of Covid-19. Findings of VAR show that covid-19 has significant positive impact on new job openings in Gig economy. Granger causality test shows a bi-directional relationship between covid-19 and Gig economy i.e. Covid-19 cases affected online job openings and online job filling affected the spread of pandemic. The Findings suggest that policymakers should make policies to support Gig economy because it has the potential to keep the world going even in the toughest of times.