Unemployment and Online Labor: Evidence from Microtasking

We analyze the relationship between unemployment and the supply of online labor for microtasking. Using detailed U.S. data from a large microtasking platform between 2011 and 2015, we study the participation and the number of hours supplied by workers in the U.S. We found 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-skilled workers. Our analyses of the intensive margin, wage elasticity, and temporal work patterns suggest that the increased participation was likely motivated by an effort to substitute income. Our findings suggest that microtasking platforms are an interesting online labor market for less educated workers. However, we also observed very low retention rates, indicative of a solely transient participation effect.