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Market power and artificial intelligence work on online labour markets

Author

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  • Duch-Brown, Néstor
  • Gomez-Herrera, Estrella
  • Mueller-Langer, Frank
  • Tolan, Songül

Abstract

We investigate three alternative but complementary indicators of market power on one of the largest online labour markets (OLMs) in Europe: (1) the elasticity of labour demand, (2) the elasticity of labour supply, and (3) the concentration of market shares. We explore how these indicators relate to an exogenous change in platform policy. In the middle of the observation period, the platform made it mandatory for employers to signal the rates they were willing to pay as given by the level of experience required to perform a project, i.e., entry, intermediate or expert level. We find a positive labour supply elasticity ranging between 0.06 and 0.15, which is higher for expert-level projects. We also find that the labour demand elasticity increased while the labour supply elasticity decreased after the policy change. Based on this, we argue that market-designing platform providers can influence the labour demand and supply elasticities on OLMs with the terms and conditions they set for the platform. We also explore the demand for and supply of AI-related labour on the OLM under study. We provide evidence for a significantly higher demand for AI-related labour (ranging from +1.4% to +4.1%) and a significantly lower supply of AI-related labour (ranging from -6.8% to -1.6%) than for other types of labour. We also find that workers on AI projects receive 3.0%-3.2% higher wages than workers on non-AI projects.

Suggested Citation

  • Duch-Brown, Néstor & Gomez-Herrera, Estrella & Mueller-Langer, Frank & Tolan, Songül, 2022. "Market power and artificial intelligence work on online labour markets," Research Policy, Elsevier, vol. 51(3).
    • Handle: RePEc:eee:respol:v:51:y:2022:i:3:s0048733321002389
    DOI: 10.1016/j.respol.2021.104446
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    2. Rolf, Steven & O'Reilly, Jacqueline & Meryon, Marc, 2022. "Towards privatized social and employment protections in the platform economy? Evidence from the UK courier sector," Research Policy, Elsevier, vol. 51(5).
    3. Anabela Marques Santos & Francesco Molica & Carlos Torrecilla Salinas, 2024. "EU-funded investment in Artificial Intelligence and regional specialization," GEE Papers 181, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jul 2024.
    4. Armenia, Stefano & Franco, Eduardo & Iandolo, Francesca & Maielli, Giuliano & Vito, Pietro, 2024. "Zooming in and out the landscape: Artificial intelligence and system dynamics in business and management," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    5. Bastani, Spencer & Waldenström, Daniel, 2024. "AI, Automation and Taxation," IZA Policy Papers 212, Institute of Labor Economics (IZA).
    6. Cantarella, Michele & Strozzi, Chiara, 2022. "Piecework and Job Search in the Platform Economy," IZA Discussion Papers 15775, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Online labour markets; Artificial intelligence; Market power; Exogenous change in platform policy;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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