doi.org/10.52340/eab.2025.17.01.04

In today's global economy, where the knowledge economy and technological advancements are becoming increasingly pervasive, digital work platforms are expanding rapidly. This shift is closely tied to the expansion of the knowledge economy, with sectors such as information technology, digital services, and freelancing gaining greater prominence. The gig economy presents new opportunities for both workers and employers by enhancing flexibility in the labor market. However, these benefits are accompanied by significant challenges, particularly concerning labor rights, taxation, and the accurate measurement of informal employment.
This paper explores the defining features of the gig economy, highlighting its relevance and the methodology employed. The focus is on key business trends within the gig economy, an analysis of unemployment trends in Georgia, and the relationship between these trends and the growth of the gig economy sector. The study employs both analytical and synthetic methods, utilizing a blend of quantitative and qualitative approaches. The research is supported by statistical data from the National Statistics Office of Georgia, the National Employment and Labor Policy Strategy for 2019-2023, and reports from the Ministry of Internally Displaced Persons from the Occupied Territories, Labor, Health, and Social Affairs of Georgia.
The findings suggest that the gig economy plays a significant role in the structural transformation of the economy. Based on these insights, the paper proposes recommendations for developing a new system to improve the registration and taxation process for temporary workers. Such a system would contribute to economic stability and enhance the country’s global competitiveness.
The gig economy is fundamentally reshaping traditional employment models by offering short-term, flexible work options. Digital platforms provide workers with opportunities to engage in various forms of work, such as freelancing, temporary contracts, and digital marketing. This flexibility is particularly beneficial for those who face challenges in securing stable, long-term employment, including students, retirees, and marginalized communities. The rise of these flexible work opportunities represents a major shift in employment structures, offering both workers and employers a new level of adaptability.
However, this flexibility also introduces significant drawbacks. Gig economy workers are often classified as independent contractors or freelancers, meaning they do not enjoy the same legal protections and benefits as traditional employees. Without formal employment status, gig workers lack access to benefits such as health insurance, retirement plans, and paid leave. Additionally, the unstable nature of gig work, with unpredictable income and job insecurity, presents considerable risks for workers, particularly those without the safety net of traditional employment.
A critical challenge within the gig economy is the difficulty of accurately measuring informal employment. The proliferation of digital platforms has led to an increase in the number of workers who are not officially recorded in employment statistics. In countries like Georgia, informal employment continues to make up a significant portion of the workforce, despite a slight decline in recent years. Freelancers and gig workers are often excluded from official labor market surveys, leading to an inaccurate understanding of employment levels and overall economic health. The lack of comprehensive data complicates policymaking and limits the government’s ability to support these workers effectively.

The rapid growth of the gig economy also complicates tax collection efforts. Many gig workers, particularly freelancers, fail to report their income or pay taxes in the same manner as traditional employees. This results in gaps in government revenue, which in turn impacts funding for public services and infrastructure. The absence of formal employment structures makes it difficult for authorities to track earnings and ensure that gig workers contribute fairly to the tax system.
To address these challenges, several policy measures are essential. First, governments and statistical agencies must improve methods for tracking informal employment in the gig economy. Digital platforms can play a key role in this by collecting more accurate data on freelancers and non-traditional workers. By providing detailed records of worker earnings and employment contracts, these platforms can help refine labor market statistics.
Another crucial step is the integration of gig workers into the formal tax system. Governments should develop specific tax codes for freelancers and independent contractors, ensuring that these workers are fairly taxed and contribute to public revenue. Additionally, mechanisms must be established to ensure that gig workers have access to social security benefits, such as pensions, health insurance, and other forms of social protection. By creating robust tax frameworks and social security systems, governments can mitigate the risks associated with gig work and provide greater financial stability to workers.
Finally, there is a pressing need to strengthen labor protections for gig workers. While the flexibility of gig work is appealing, it should not come at the expense of basic workers’ rights. Governments should introduce regulations that guarantee a minimum wage, paid sick leave, and access to health insurance for gig workers. Digital platforms should also be required to ensure safe working conditions and educate workers about their rights and responsibilities. Public awareness campaigns could further help raise knowledge of legal protections and guide workers on how to access necessary services, such as healthcare and legal support.
While the gig economy presents new opportunities and flexibility, it also introduces significant challenges. To ensure its positive contribution to the broader economy, governments must implement policies that address informal employment, tax compliance, and social protections for gig workers. By improving data collection, establishing fair tax frameworks, and introducing comprehensive labor protections, policymakers can foster a more stable, inclusive, and equitable labor market that benefits workers, employers, and society as a whole.

Keywords: Gig economy, labor market, digital platform, freelancer, digital marketing, informal employment.

JEL Codes: J21, J23, J24, J31, J46.

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