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

Abstract

Information and communication technologies have long been predicted to spread economic opportunities to rural areas. However, the actual trend in the 21st century has been the opposite. Knowledge spillovers have fueled urbanization and pulled job-seekers into large cities, increasing the gap with rural areas. We argue that new assemblages of technologies and social practices, so-called ’online labor 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 analyzing data from a leading online labor 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 labor market. Rural counties also supplied, on average, higher-skilled online work than urban areas did. However, many of the most remote regions of the country did not participate in the online labor market at all. Our findings highlight the potentials and limitations of such platforms for regional economic development.

Keywords: Information and Communication Technology, Platform Economy, Online Labor Platforms, Urban-Rural Divide, Spatial Inequality, Regional Development

JEL Classification: J24, J61, L17, R12