a column by Arindrajit Dube, Jeff Jacobs, Suresh Naidu and Siddharth Suri for VOX: CEPR’s Policy Portal
Monopsony refers to the market power that employers wield in labour markets. This column explores monopsony power in online labour markets, using observational and experimental data from Amazon’s Mechanical Turk platform.
Both datasets suggest an employer labour supply elasticity of close to 0.1, suggesting that a 10% reduction in wages would only see a 1% drop in willing labour. This points to substantial employer market power in a supposedly frictionless setting.
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