Institutional Segmentation, Inequality in Work Opportunities, and Income in Digital Labor Markets: Evidence Based on Witkey Transactions

ABSTRACT

Digital technologies are rapidly transforming the world of work, creating digital labor markets. Based on transaction cost theory and labor market segmentation theory, this study adopts binary logistic and multiple regression models and uses EPWK transaction data (n = 21,808) to empirically examine the institutional segmentation phenomenon of digital labor markets. This study finds institutional segmentation existing in such markets, owing to differences in the Witkey level among employees, thus leading to inequality in work opportunities and labor remuneration income. Further, transaction mode and task type moderate the segmentation phenomenon. Suggestions are offered to reduce institutional segmentation by improving the platform system.

KEYWORDS:

• Digital labor market
• institutional segmentation
• work opportunities
• income inequality

JEL:

• J4
• J20
• D31

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1. Witkey is the abbreviation of the “key of wisdom,” which refers to those who transform their wisdom, knowledge, ability, and experience into real benefits through the Internet. They use the Internet to solve problems in science, technology, work, life, learning, and other aspects and let their knowledge, wisdom, experience, and service turn into economic benefits (Liu 2011).

2. These nine task design kinds are creative design, industrial design, visual communication design, promotional materials design, e-commerce design, card design, animation design, animation production, and television services.

3. The website of EPWK is https://task.epwk.com.

4. The 13 fields include the Witkey level, task transaction mode, task type, task design kind, task release time, task acceptance time, number of people concerned with the task, number of bidders for the task, bid price, estimated working days of Witkey when bidding, Witkey credit, bidding result, and Witkey’s income from completing the task.

5. The correlations between the variables are all significant at the 5% level and the absolute values of the coefficients are below 0.5.

Additional information

Funding

This research was conducted with no funding support.