New research highlights financial health of gig workers in Malaysia and China

  • 21 December 2020
  • 4 minutes read

The COVID-19 pandemic has brought home the extent to which our economies – and our industries – are being reshaped by technology. One such industry is ‘the gig economy,’ a labor economy of sorts where speed and convenience are the norm, characterized by temporary or short-term work opportunities which are sometimes over in a matter of minutes.

Asia cemented its status as a gig economy hub in the last year, with the region emerging as a hotspot for freelance work in both the formal and informal economy. Examples of workers in the gig economy in Asia include an Uber, Grab or a Didi driver transporting riders across town, a foodpanda partner delivering food to people at home or their office, or a cleaner hired off of an app to clean a house for a few hours.

At a glance, this popular trend brings benefits and new earning opportunities. However, there are trade-offs: while folks participating in gig work are exempt from traditional workplace restrictions, the nature of gig work where gig workers earn based on each “short-term” gig means that they could face unpredictable incomes and have difficulties accessing relevant financial services that meet their needs.

The allure of the gig economy

The gig economy boomed within the past decade, largely because of the ubiquitous usage of smartphones, a surging demand for on-demand services, and the billions of dollars of venture capital money invested in companies within this industry. The question the gig economy faces in the coming years isn’t whether it will grow, but by how much it will grow as the world rebounds from COVID-19.

The gig economy, at least in its modern 21st-century iteration, exists because of technology both in Asia and around the world. There are countless advantages to a tech-powered gig economy. It drives market efficiencies in record time, allowing gig workers to make an income while enjoying the flexibility of hours and increased autonomy. Gig workers are also able to take on gigs from different platforms depending on where gigs might be available and which ones offer a compelling mix of compensation and work experience.

Furthermore, many gig workers have jobs or businesses elsewhere and are able to supplement their primary source of income through gig work. The gig economy is also inherently inclusive, allowing the participation of groups that traditional economies might leave out such as women, youth, and the elderly.

For all its perks, the nature of labour and income in the gig economy poses trade-offs for gig workers. While the whole world is reeling under the force of the pandemic, with many of them losing their jobs and seeing their savings erode, gig workers could face unique challenges. This would require tailored and innovative solutions that may not currently exist in order to improve gig workers’ financial health and overall financial goals.

Read more about the gig economy here.

In-depth study

In an effort to better understand the financial realities of gig workers in general (and as a result of COVID-19), and to design interventions to boost their financial health, UNCDF’s Centre for Financial Health recently completed an in-depth study of 16,166 gig workers in two countries, China and Malaysia. In this study, entitled The Gig Economy and Financial Health: A snapshot of Malaysia & China, UNCDF explores the landscape of the gig economy in Malaysia and China, focusing on the financial concerns and well-being of gig workers.

Read more about financial health here.

The study —realized under the i3 Program which is funded by MetLife Foundation—focused on the tech-powered gig economy where short-term work is procured on gig platforms: Grab, which offers a range of everyday services, including ride-hailing, on-demand food, package and grocery delivery; foodpanda, a mobile food delivery marketplace; FastJobs, a job platform in Malaysia facilitating both long-term and short-term gig employment; GoGet Malaysia an on-demand workforce technology also offering short-term jobs; and Lionbridge Group, a logistics and fleet-management company in China that contracts self-employed long-haul truck drivers.

With research conducted between February and August 2020, subjects were interviewed about why they choose to work in the gig economy, their financial habits and their overall financial health. They were also asked questions about barriers to financial security and certain samples were also asked about the impact of COVID-19 on their overall situation.

Read a quick overview of our research approach here.

Overall, the subjects revealed remarkably similar sentiments across generations and occupations. For example, all subjects acknowledged that they felt a host of personal, social, and economic anxieties, but they also claimed that their independence was a choice and the prospect of new opportunities a boon, that they would not give up the benefits that came with it. Although they worried about unpredictable schedules and finances, they felt they had mustered more courage and were leading richer lives than their corporate counterparts.

While the flexibility of hours and extra source of funds were cited as top reasons to engage in gig work in the Malaysia sample, the lack of traditional jobs coupled with familial responsibilities emerge as top reasons in the China sample. However, gig workers in both countries indicated that an uncertain income outlook is their primary concern about being a gig worker. Meanwhile, the lack of social security benefits was a concern for less than a quarter of the sample. This suggests that when earning a primary income becomes a challenge, social security benefits—also an important component of job security—might take a backseat.

Across the five platforms, those that saved frequently were a minority, with a majority of gig workers using first-level financial services such as transaction savings accounts and debit cards, but wide use of a range of financial products was rather limited. The use of sophisticated products such as insurance and investments is more prevalent among those earning a higher income.

A key takeaway from this research is the importance of financial behaviours: frequent saving, moderate spending and financial planning. While a savings habit turns out as a significant predictor of all financial health outcomes, moderate spending and financial planning are also central to a good financial life overall. Gig workers who save more frequently, spend within their means and undertake more detailed financial planning are more likely to enjoy financial security and demonstrate financial resilience in the face of financial shocks, such as COVID-19.

Download the complete study here – The Gig Economy and Financial Health: A Snapshot of Malaysia and China

More data is available in our report decks, available for download below:

Financial Health of Gig Workers: Introduction and Research Design Financial Health of Gig Workers: A Case Study of GoGet in Malaysia Financial Health of Gig Workers: A Case Study of Lionbridge Group in China. Gig Economy, Financial Health, and COVID-19: A Case Study of FastJobs in Malaysia Gig Economy, Financial Health and COVID-19: A Case Study of foodpanda in Malaysia


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April Khor

Innovation Consultant

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Audrey Misquith

Data and Insights Consultant


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