Competition in online job marketplaces: towards a global labour market for outsourcing services?

Abstract A new form of service outsourcing has emerged, namely the global online job marketplace for freelance contractors. Such platforms are currently the closest proxy to the idea of a global labour market where everyone competes for jobs regardless of location. In this article, we examine how competition manifests itself on one such global online platform, namely oDesk. We present a comparative analysis of the relative wages and the rewarding of skills and expertise of contractors from selected countries and investigate whether, via labour arbitrage, wage convergence takes place between Western and developing countries. We find that wage convergence is noticeable but experience and skills hardly translate into better remuneration. While service outsourcing (or microwork) via global online marketplaces provides new employment opportunities for freelancers around the world, the intense competition and the inherent restrictions of this type of marketplace limit the financial gains for most contractors.