Precarity Trap: Gig Economy Failing Asia's Youth

In countries like Indonesia, the Philippines, and Vietnam, the gig economy has further exacerbated the problem by creating flexible but often unstable jobs. More than 44% of youth in Indonesia is reported to work in the informal sector, often without formal contracts, making it difficult for them to secure financial stability or social protections.

Cultural expectations also intensify the pressures faced by youth. In many Asian countries, stable employment is seen as a symbol of personal and social success. However, for many young people who can only secure precarious jobs, this cognitive dissonance creates psychological stress.

In South Korea and Japan, for instance, the social pressure to secure permanent jobs has contributed to rising levels of mental health issues, including a notable increase in youth suicides .

Technology, which was initially seen as a gateway to new employment opportunities, has also played a role in expanding the insecurity of these jobs.

While the gig economy has created new opportunities for young workers, particularly in logistics and transportation (like Gojek and Grab drivers), these jobs come with significant financial risks due to the lack of social protections. Many of these workers rely on fluctuating demand, which results in unpredictable income.

However, technology also holds the potential for transformative solutions. Blockchain technology and smart contracts are being explored to improve transparency and provide better security for gig workers.

These platforms can ensure that workers receive timely payments and have access to basic social protections. Countries like Singapore are exploring collaborations with tech companies to integrate these protections into their gig economy frameworks .

Precarious work also poses challenges to social mobility. Youth trapped in temporary or informal jobs often lack access to skill-building opportunities or further education, making it difficult for them to transition to more secure and higher-paying jobs.

This exacerbates generational inequality, particularly for those in lower-income groups. To address this, upskilling and reskilling programs must be prioritized to ensure that youth can transition to sectors with better job security, such as renewable energy and information technology.

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At the policy level, governments in the Asia-Pacific region need to enhance social protections for young workers, including expanding access to healthcare and pension schemes for those in the informal sector.

Tax incentives for companies that offer long-term contracts to young workers could encourage the creation of more stable jobs in the formal sector. Additionally, vocational training and educational initiatives need to be more closely aligned with future labor market demands.

With a more integrated approach-combining public policy, technological innovation, and social change-the Asia-Pacific region can create a safer and more inclusive labor market for youth, paving the way for sustainable economic growth in the long term.

Setyo Budiantoro is a fellow at the IDEAS Global Program, Massachusetts Institute of Technology (MIT), Nexus Strategist The Prakarsa

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