Unemployment and Online Labor

We analyze the relationship between unemployment and the supply of online labor for microtasking. Using detailed US data from a large microtasking platform between 2011 and 2015, we study the participation and the number of hours supplied by workers in the US. We find that more individuals registered on the platform and completed microtasks as the unemployment level in the commuting zone increased. This effect was strongest in regions with a high share of low-skill workers. Our analyses of the intensive margin, the wage elasticity, and the temporal work patterns suggest that the increased participation was likely motivated by an effort to substitute income. Our findings suggest that microtasking platforms appear to be an interesting online labor market for less educated workers. However, we also observe very low retention rates, indicative of a solely transient participation effect.

Laitenberger, Ulrich, Steffen Viete, Olga Slivkó, Michael Kummer, Kathrin Borchert and Matthias Hirth (2018), Unemployment and Online Labor, ZEW Discussion Paper No. 18-023, Mannheim, published in: Management Information Systems Quarterly.