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Outside Options and Labor Supply: Evidence from the Gig Economy

Author

Listed:
  • Sydnee Caldwell
  • Emily Oehlsen

Abstract

We use randomized pay experiments among Uber drivers, paired with a natural experiment in access to a competitor, to examine how outside options shape labor supply to the firm. When hours are flexible, the firm-specific labor supply elasticity combines a market-hours component and a firm-substitution component. Access to a single competing platform nearly doubles drivers’ firm-specific elasticity and cuts the implied monopsony markdown from 68% to about 50%. The same experiments identify sex differences: women are about twice as elastic to the market as men, yet no less elastic to their employer.

Suggested Citation

  • Sydnee Caldwell & Emily Oehlsen, 2026. "Outside Options and Labor Supply: Evidence from the Gig Economy," NBER Working Papers 35626, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:35626
    Note: LS
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    More about this item

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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