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An Example of Negative Wage Elasticity for YouTube Content Creators

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  • Barbos, Andrei
  • Kaisen, Joshua

Abstract

The neoclassical model of labor supply implies a positive wage elasticity absent significant income effects. This paper documents an instance of negative wage elasticity in video production by YouTube content creators. We exploit viral videos as an exogenous source of significant wage increases and investigate the productivity dynamics around the time a channel's video went viral, against a control group of channels that had no viral videos. Our analysis shows a productivity decline during the week after a video goes viral, despite the higher wages, followed by a gradual return towards pre-treatment productivity. This average productivity decline is driven by the channels with the lower numbers of subscribers. Channels in the upper quartile of the subscriber size distribution increase productivity after their video goes viral. We also show that average productivity responds positively to smaller increases in wages. These findings are consistent with an alternative model of labor supply, where a fraction of the content creators exhibit income targeting.

Suggested Citation

  • Barbos, Andrei & Kaisen, Joshua, 2022. "An Example of Negative Wage Elasticity for YouTube Content Creators," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 382-400.
    • Handle: RePEc:eee:jeborg:v:203:y:2022:i:c:p:382-400
    DOI: 10.1016/j.jebo.2022.09.012
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    More about this item

    Keywords

    Income Targeting; Negative Wage Elasticity; YouTube;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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