How welfare states influence online platform work in Europe

Abstract

Digital labor platforms are reshaping global labor markets by enabling the transnational contracting of service workers. While the dominant perspective emphasizes market forces, predicting that lower-wage countries will dominate the supply side, this view overlooks the institutional context in which platform labor emerges. This paper advances the argument that national welfare institutions are key to shaping participation in the platform economy. We provide the first large-scale cross-national comparative analysis of platform labor, combining micro-level data from one of the world’s largest remote work platforms with country-level indicators from 26 European countries. In line with market expectations, we find that lower-wage countries supply most low-skilled labor, while higher-wage countries show a more balanced distribution between low- and high-skilled workers. Crucially, however, our analysis reveals that greater welfare state generosity is associated with lower levels of platform participation, especially in low-skilled occupations. We argue that platform labor cannot be understood solely as a function of technological change or wage differentials. It is also an expression of structural constraints: where social protections are weak, people are more likely to turn to precarious forms of online work.