Digital leisure and the gig economy: a two-sector model of growth

Abstract

The process of market digitization at the world level and the increasing and extended usage of digital devices reshaped the way consumers employ their leisure time, with the emergence of what can be called digital leisure. This new type of leisure produces data that firms can use, with no explicit cost paid by consumers. At the same time, the global digitalization process has allowed workers to allocate part of (or their whole) working time to the Gig Economy sector, which strongly relies on data as a production factor. In this paper, we develop a two-sector growth model to study how the above mechanism can shape the dynamics of growth, also assessing how shocks in either the traditional or the Gig Economy sector can modify the equilibrium of the overall economy. We find that shocks in the TFP can crowd out working time from a sector to the other, while shocks on the elasticity of production to data determines a change in the time allocated to digital leisure.