Incentives in the gig economy

Abstract

Fixed-term, contract-based employment is continuously spreading in the world. It has been given many names; in this paper it is termed the gig economy in the most comprehensive sense. We are going to present the basic features of the gig economy with special attention to short-term, incentive contracts affecting the relationship between employer and worker. In the gig economy employers use performance related wage to incentivise workers to work with the required intensity. By that incentive, employers also source out their risk to their workers whose wages and all their employment becomes uncertain. We are presenting in the paper that uncertainty arising out of short-term incentive contracts is the cause of many psychological and social ills.