Digital Labour Platforms as Shock Absorbers: Evidence from the COVID-19 Pandemic in Mozambique

Abstract

Digital labour platforms have grown five-fold over the past decade, enabling significant expansion of gig work worldwide. We interrogate the critique that these platforms tend to amplify aggregate shocks for registered workers. Based on the universe of records from a matching platform for manual freelancers in Mozambique, we analyse how task supply and demand altered with the onset of COVID-19. Treating the pandemic as a structural break, which extends to an event study analysis, we find it was associated with a net increase in tasks demanded per worker, but no clear change in supply growth (new registrations). While these general trends are evident across multiple market segments, there is also evidence of relatively higher demand for female as compared to male workers during the pandemic. This suggests digital labour markets can help some workers adjust to economic shocks in low-income contexts.