Academic journal article Monthly Labor Review

Examining the Market Power of On-Demand Labor Platforms in the Gig Economy

Academic journal article Monthly Labor Review

Examining the Market Power of On-Demand Labor Platforms in the Gig Economy

Article excerpt

The authors collected data from Amazon Mechanical Turk (MTurk), a popular online platform that allows employers to post short-term tasks (some that require less than a minute to complete) that potential workers can accept for pay (as low as $0.01). Their research offers empirical estimates of recruitment elasticity and retention elasticity and a double-machine-learning estimator is used to examine the variations in these rewards. Recruitment elasticity refers to the propensity for the reward (compensation) and associated task to attract workers. Retention elasticity refers to how well bonus payments attract workers who have already accepted a job from a given employer to accept additional assignments from the same employer.

While the results displayed some heterogeneity, the implied elasticities were consistently small. The research reported that observational evidence shows low recruitment and retention elasticities for employers. These findings have important implications for online labor markets. Over time, the importance of these implications may increase as online platforms become the ideal environment to reduce costs. …

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