The First Meeting of the BRICS Network of Scientific Research institutes of labor

Dr. Evgeny Styrin took part in The First Meeting of the BRICS Network of Scientific Research institutes of labor organized by All-Russian Scientific Research Institute of Labor of the Ministry of Labor and Social Protection of the Russian Federation. The meeting brought together researchers and practitioners from BRICS countries studying the employment issues by means of digital platforms and other means of distant work. 

In his report, «The institutional environment and gig platform transaction cost solutions», the author presented the key research findings concerning the relationship between general employment regulation in the country and the level of the transaction costs existing in the platform. To do so Dr. Styrin and his co-authors analyzed the whole process of job provision through the digital platforms breaking it in three types of the transactions: ex ante, ex interim, ex post. The data for analysis was took through extensive interviews with more than 3000 respondents from 52 countries and 83 gig-platforms.  

The results stress that in the era of digitalization, in which IT technology-based businesses easily cross borders, the government, as a regulator of economic processes is still an important actor that influences the business environment and the transaction costs for economic agents. 

The results suggest that the effects from changes in the regulation on the choice between alternative governance structures depend on the relative position of the regulation in the strictness scale. Initiatives that result in an increase in the strictness of regulation when it is already high might lead to a shift from employment to contracting through gig platforms, thus weakening the regulatory effect. When decreasing regulatory constraints on already relatively deregulated labor markets, the attractiveness of contracting through the gig platform would increase as well, following transaction cost minimization logic. 

The presented research does not address the issue of the optimal level of labor market regulation. The analysis considers only the possibility of gig platforms to economize transaction costs under the shadow of the institutional environment in the user and platform countries. The actual optimal level of labor market regulation may depend on various factors and societal choices. This could be a topic for future studies.