Monopsony in Online Labor Markets

31 Pages Posted: 20 Mar 2018

See all articles by Arindrajit Dube

Arindrajit Dube

University of Massachusetts Amherst

Jeff Jacobs

Columbia University

Suresh Naidu

Columbia University

Siddharth Suri

Microsoft Corporation - Microsoft Research, New York City

Date Written: March 2018

Abstract

On-demand labor platforms make up a large part of the “gig economy.” We quantify the extent of monopsony power in one of the largest on-demand labor platforms, Amazon Mechanical Turk (MTurk), by measuring the elasticity of labor supply facing the requester (employer) using both observational and experimental variation in wages. We isolate plausibly exogenous variation in rewards using a double-machine-learning estimator applied to a large dataset of scraped MTurk tasks. We also re-analyze data from 5 MTurk experiments that randomized payments to obtain corresponding experimental estimates. Both approaches yield uniformly low labor supply elasticities, around 0.1, with little heterogeneity.

Suggested Citation

Dube, Arindrajit and Jacobs, Jeff and Naidu, Suresh and Suri, Siddharth, Monopsony in Online Labor Markets (March 2018). NBER Working Paper No. w24416. Available at SSRN: https://ssrn.com/abstract=3143341

Arindrajit Dube (Contact Author)

University of Massachusetts Amherst ( email )

Jeff Jacobs

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Suresh Naidu

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Siddharth Suri

Microsoft Corporation - Microsoft Research, New York City ( email )

641 Avenue of Americas
New York, NY 10011
United States

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