Paradox of a Gig Economy: Employment or Disguised Underemployment?

A university graduate delivers meals on a motorcycle. Another earns dollars designing websites for foreign clients. Both belong to Bangladesh’s gig economy, meaning temporary, freelance or task-based work usually arranged through digital platforms. Yet their circumstances may differ fundamentally: one may be building a career and the other accepting whatever work exists because a suitable job does not. Counting both as employment growth obscures the difference between opportunity and necessity.
The paradox is clear: the sector that generates income and employment may also reveal a deeper failure of the labour market. As more educated young people turn to gig work, measured employment rises, potentially concealing the shortage of productive jobs commensurate with their education and skills. By disguised underemployment, I mean work that fills the day and registers as employment, but whose returns fall well short of what the worker’s education, effort and time should command. Gig work is neither inherently undesirable nor dispensable; every economy needs people to perform these services, and some workers choose them for their flexibility and earning potential. The question is whether its expansion reflects growing productive opportunities or an economy increasingly unable to create suitable employment for its educated workforce.
According to World Bank, 14 million young people reached working age between 2016 and 2022, while Bangladesh’s economy generated only 8.7 million jobs. The gap signals job creation lagging demographic growth, not necessarily unemployment. IMF estimated unemployment among highly educated youth at approximately 25 per cent in 2024, underscoring a troubling contradiction: Bangladesh has expanded educational attainment without generating sufficient opportunities to employ its increasingly educated workforce. Many consequently turn to gig work for primary or supplementary income.
No comprehensive and reliable estimate of Bangladesh’s gig workforce exists. Industry estimates reported in the press range from roughly 8,00,000 to more than 10,00,000 workers, while other reports acknowledge the absence of reliable freelancer statistics. Moreover, registered accounts do not necessarily represent individual workers. One person may maintain multiple accounts, work intermittently, or combine gig assignments with regular employment.
What the available evidence reveals is a sharply divided sector. A World Bank survey reported average monthly platform earnings of approximately Tk82,943 among online freelancers, many of whom were university graduates. However, this figure reflects a selected group of skilled, English-proficient workers, without accounting for working hours or associated expenses. Ride-sharing drivers and delivery workers operate under fundamentally different economic conditions, often facing substantial operating costs, uncertain earnings and limited employment security. Treating these distinct groups as a single labour market category risk concealing more than it reveals.
Gross receipts should not be mistaken for disposable income. Consider a ride-sharing driver earning Tk35,000 in monthly fares. After deducting platform commissions, fuel, maintenance, depreciation, mobile data and financing costs, which might total Tk17,000-20,000, the driver retains only Tk15,000-18,000. Spread over 12-hour days for 26 days, including time spent waiting for fares, that is roughly Tk48-58 an hour. Such a worker is statistically employed but economically underutilised. This distinction matters because the conventional definition of time-related underemployment applies only to workers willing and available to work additional hours. The driver may already be working excessively long hours, yet earning too little to achieve reasonable economic security. The problem is therefore not insufficient working hours but inadequate returns to labour.
The fairest test of gig employment is to ask: compared with what alternative? For a woman facing barriers to conventional employment, a student seeking supplementary income, or a household without access to salaried work, gig employment may be preferable to unemployment. For an engineer unable to find work in their profession, however, the appropriate comparison is with the productive employment a healthier economy might have provided. Thus, the same delivery job may represent occupational choice for one worker and economic necessity for another. Labour statistics that overlook this distinction risk overstating the economy’s capacity to absorb its increasingly educated workforce.
The economic verdict therefore differs across segments. For skilled online freelancers, gig work can provide a pathway to professional advancement, higher earnings and foreign exchange generation. For many engaged in location-based services, however, it functions primarily as a coping mechanism, absorbing workers whom the formal economy has failed to accommodate.
Nor should digital expansion be mistaken for structural transformation. Ride-sharing platforms may improve transportation efficiency, and online marketplaces expand commercial opportunities, yet connecting customers with service providers cannot substitute for expanding manufacturing, technology-intensive services, and domestic entrepreneurship. When credit is misallocated, corruption raises business costs, and productive investment is discouraged, educated young people face limited opportunities regardless of how many platforms exist. Digital platforms may soften the consequences of these institutional weaknesses, but they cannot remedy their causes. Genuine development requires sustained improvements in labour productivity, skill formation and productive capacity, not merely the multiplication of low-margin transactions.
The risks go beyond unstable earnings. Platforms determine commissions, assign work, evaluate performance and suspend accounts under rules workers have little power to influence. Nominal independence thus coexists with substantial dependence, while accidents, illness or sudden account suspension can turn flexibility into economic insecurity without retirement protection. In June 2026, International Labour Organization adopted Convention No. 193 on decent work in the platform economy, addressing safety, remuneration, social protection, algorithmic management and fair treatment. Although binding only on ratifying countries and not requiring universal employee classification, it offers Bangladesh a framework for protecting workers without sacrificing flexibility.
Policy must begin with reliable measurement. Bangladesh Bureau of Statistics should distinguish registered accounts from active workers, primary from secondary occupations, gross from net earnings, and online from location-based work. It should also record working hours, qualifications, preferences, accident risks and transitions into better-paying employment. Without such evidence, policymakers cannot determine whether gig work represents opportunity, permanent livelihood or disguised labour market stagnation.
Protection and productivity must advance together. Location-based workers need transparent commissions, accessible dispute resolution, accident insurance and portable social protection. Freelancers need advanced training in software, design, digital finance and marketing. Artificial intelligence makes this urgent, because it threatens the routine digital assignments on which many entry-level freelancers depend while raising the premium on higher-level skills. Such training, together with affordable credit and simplified business registration, could help skilled individuals progress from selling labour to establishing enterprises that create employment.
The true measure of success is not how many people download an app or complete a delivery, but whether gig work generates sustainable earnings, utilises skills productively and creates opportunities for upward economic mobility. Bangladesh should welcome the gig economy without confusing a coping mechanism with a development strategy. Gig work can serve as a bridge to productive employment, but it must not become statistical camouflage for the economy’s failure to create sufficient productive and sustainable jobs.

The writer is a former physicist and nuclear engineer at the BAEC and Professor Emeritus of Economics at Eastern Michigan University, USA. He can be reached at [email protected]