Task search and labor supply in the platform economy

In this paper, we study how platform workers adjust their labor supply in response to fluctuations in the task offer rate. Using extensive survey data from platform workers throughout Europe, we develop a novel method to estimate workers' labor supply elasticity to the wage fluctuations that result from the unpaid time spent searching for or waiting for available tasks. Our findings reveal that variations in hourly earnings, when attributable to task search, are inversely related to labor supply. Conversely, labor supply appears to be largely inelastic in response to absolute changes in the pay rate. The estimated elasticities are applicable across diverse categories of platform workers and are robust to a wide array of misspecification and endogeneity tests.