Who benefits from online gig economy platforms?

Christopher Stanton and Catherine Thomas

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Online labor platforms for short-term remote work have many more job seekers than available jobs. Despite their relative abundance, workers capture a substantial share of the surplus from transactions. We draw this conclusion from demand estimates that imply workers’ wages include significant markups over costs and a survey that validates our surplus estimates. Workers retain a significant share of the surplus because demand-side search frictions and worker differentiation reduce direct competition. Finally, we show that applying traditional employment regulations to online gig economy platforms would lower job posting and hiring rates, reducing aggregate surplus for all market participants, including workers.

Keywords: online labor markets; gig economy; employment regulation (search for similar items in EconPapers)
JEL-codes: F31 J22 J23 J31 J64 M51 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2025-06-01
New Economics Papers: this item is included in nep-lma
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Published in American Economic Review, 1, June, 2025, 115(6), pp. 1857 - 1895. ISSN: 0002-8282

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