ICTs and the Urban-Rural Divide: Can Online Labour Platforms Bridge the Gap?

Abstract

Information and communication technologies have long been predicted to make cities as hubs of economic organisation obsolete and spread economic opportunities to rural areas. However, the actual trend in the 21st century has been the opposite. Knowledge spillovers have fuelled urbanisation and pulled job-seekers into large cities, increasing the gap to deprived rural areas. We argue that new assemblages of technologies and social practices, so-called ’online labour platforms’, have recently started to counter this trend. By providing effective formal and informal mechanisms of enforcing cooperation, these platforms for project-based remote knowledge work enable users to hire and find work across distance. In analysing data from a leading online labour platform in more than 3,000 urban and rural counties in the United States, we find that rural workers made disproportionate use of the online labour market. Rural counties also supplied, on average, higher skilled online work than urban areas did. However, many of the most deprived regions of the country did not participate in the online labour market at all. Our findings highlight the potentials and limitations of such platforms for regional economic development.

Keywords: Platform Economy, Online Labour Markets, Internet Effects on Regional Development, Rural Employment, Urban-Rural Divide, Labour Mobility, Spatial Inequality

JEL Classification: J24, J61, L17, R12