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Monopsony in Online Labor Markets

Arindrajit Dube, Jeff Jacobs, Suresh Naidu and Siddharth Suri

American Economic Review: Insights, 2020, vol. 2, issue 1, 33-46

Abstract: Despite the seemingly low switching and search costs of on-demand labor markets like Amazon Mechanical Turk, we find substantial monopsony power, as measured by the elasticity of labor supply facing the requester (employer). We isolate plausibly exogenous variation in rewards using a double machine learning estimator applied to a large dataset of scraped MTurk tasks. We also reanalyze data from five MTurk experiments that randomized payments to obtain corresponding experimental estimates. Both approaches yield uniformly low labor supply elasticities, around 0.1, with little heterogeneity. Our results suggest monopsony might also be present even in putatively "thick" labor markets.

JEL-codes: C44 J22 J23 J42 (search for similar items in EconPapers)
Date: 2020
Note: DOI: 10.1257/aeri.20180150
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