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Monopsony in Online Labor Markets

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  • Arindrajit Dube
  • Jeff Jacobs
  • Suresh Naidu
  • Siddharth Suri

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

  • Arindrajit Dube & Jeff Jacobs & Suresh Naidu & Siddharth Suri, 2018. "Monopsony in Online Labor Markets," NBER Working Papers 24416, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24416
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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