IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/24416.html
   My bibliography  Save this paper

Monopsony in Online Labor Markets

Author

Listed:
  • 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
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w24416.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    2. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-954, July.
    3. Douglas O. Staiger & Joanne Spetz & Ciaran S. Phibbs, 2010. "Is There Monopsony in the Labor Market? Evidence from a Natural Experiment," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 211-236, April.
    4. John Horton & David Rand & Richard Zeckhauser, 2011. "The online laboratory: conducting experiments in a real labor market," Experimental Economics, Springer;Economic Science Association, vol. 14(3), pages 399-425, September.
    5. Doerrenberg, Philipp & Duncan, Denvil & Löffler, Max, 2023. "Asymmetric labor-supply responses to wage changes: Experimental evidence from an online labor market," Labour Economics, Elsevier, vol. 81(C).
    6. Lawrence F. Katz & Alan B. Krueger, 2016. "The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015," Working Papers 603, Princeton University, Department of Economics, Industrial Relations Section..
    7. Fosgerau, Mogens & Melo, Emerson & Shum, Matt, 2017. "Discrete Choice and Rational Inattention: a General Equivalence Result�," MPRA Paper 76605, University Library of Munich, Germany.
    8. Berinsky, Adam J. & Huber, Gregory A. & Lenz, Gabriel S., 2012. "Evaluating Online Labor Markets for Experimental Research: Amazon.com's Mechanical Turk," Political Analysis, Cambridge University Press, vol. 20(3), pages 351-368, July.
    9. Peter Kuhn, 2004. "Is monopsony the right way to model labor markets? a review of Alan Manning's monopsony in motion," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 11(3), pages 369-378.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michele Cantarella & Chiara Strozzi, 2018. "Labour market effects of crowdwork in US and EU: an empirical investigation," Department of Economics 0139, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    2. Michele Cantarella & Chiara Strozzi, 2018. "Labour market effects of crowdwork in the US and EU: an empirical investigation," Center for Economic Research (RECent) 140, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    3. Jae Song & David J Price & Fatih Guvenen & Nicholas Bloom & Till von Wachter, 2019. "Firming Up Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 1-50.
    4. Rebecca R Carter & Analisa DiFeo & Kath Bogie & Guo-Qiang Zhang & Jiayang Sun, 2014. "Crowdsourcing Awareness: Exploration of the Ovarian Cancer Knowledge Gap through Amazon Mechanical Turk," PLOS ONE, Public Library of Science, vol. 9(1), pages 1-10, January.
    5. Federico Huneeus & Kory Kroft & Kevin Lim, 2021. "Earnings Inequality in Production Networks," NBER Working Papers 28424, National Bureau of Economic Research, Inc.
    6. Francesco Amodio & Nicolás de Roux, 2021. "Labor Market Power in Developing Countries: Evidence from Colombian Plants," Documentos CEDE 19267, Universidad de los Andes, Facultad de Economía, CEDE.
    7. Austan Goolsbee & Chad Syverson, 2023. "Monopsony Power in Higher Education: A Tale of Two Tracks," Journal of Labor Economics, University of Chicago Press, vol. 41(S1), pages 257-290.
    8. Pérez, Jorge & Vial, Felipe & Zárate, Román, 2022. "Urban Transit Infrastructure: Spatial Mismatch and Labor Market Power," Research Department working papers 1992, CAF Development Bank Of Latinamerica.
    9. Masha Shunko & Julie Niederhoff & Yaroslav Rosokha, 2018. "Humans Are Not Machines: The Behavioral Impact of Queueing Design on Service Time," Management Science, INFORMS, vol. 64(1), pages 453-473, January.
    10. Abel Brodeur, Nikolai M. Cook, Anthony Heyes, 2022. "We Need to Talk about Mechanical Turk: What 22,989 Hypothesis Tests Tell Us about Publication Bias and p-Hacking in Online Experiments," LCERPA Working Papers am0133, Laurier Centre for Economic Research and Policy Analysis.
    11. Jeanette A.M.J. Deetlefs & Mathew Chylinski & Andreas Ortmann, 2015. "MTurk ‘Unscrubbed’: Exploring the good, the ‘Super’, and the unreliable on Amazon’s Mechanical Turk," Discussion Papers 2015-20, School of Economics, The University of New South Wales.
    12. Martins, Pedro S. & Melo, António, 2024. "Making their own weather? Estimating employer labour-market power and its wage effects," Journal of Urban Economics, Elsevier, vol. 139(C).
    13. Haas, Nicholas & Hassan, Mazen & Mansour, Sarah & Morton, Rebecca B., 2021. "Polarizing information and support for reform," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 883-901.
    14. Cantarella, Michele & Strozzi, Chiara, 2019. "Workers in the Crowd: The Labour Market Impact of the Online Platform Economy," IZA Discussion Papers 12327, Institute of Labor Economics (IZA).
    15. Atalay, Kadir & Bakhtiar, Fayzan & Cheung, Stephen & Slonim, Robert, 2014. "Savings and prize-linked savings accounts," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 86-106.
    16. Chen Yeh & Claudia Macaluso & Brad Hershbein, 2022. "Monopsony in the US Labor Market," American Economic Review, American Economic Association, vol. 112(7), pages 2099-2138, July.
    17. Azzam, Tarek & Harman, Elena, 2016. "Crowdsourcing for quantifying transcripts: An exploratory study," Evaluation and Program Planning, Elsevier, vol. 54(C), pages 63-73.
    18. Jha, Priyaranjan & Rodriguez-Lopez, Antonio, 2021. "Monopsonistic labor markets and international trade," European Economic Review, Elsevier, vol. 140(C).
    19. Dato, Simon & Feess, Eberhard & Nieken, Petra, 2019. "Lying and reciprocity," Games and Economic Behavior, Elsevier, vol. 118(C), pages 193-218.
    20. Wladislaw Mill & Cornelius Schneider, 2023. "The Bright Side of Tax Evasion," CESifo Working Paper Series 10615, CESifo.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:24416. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.