Working Paper: NBER ID: w28702
Authors: John J. Horton
Abstract: The sharp devaluation of the ruble in 2014 increased the real returns to Russians from working in a global online labor marketplace, as contracts in this market are dollar-denominated. Russians clearly noticed the opportunity, with Russian hours-worked increasing substantially, primarily on the extensive margin—incumbent Russians already active were fairly inelastic. Contrary to the predictions of bargaining models, there was little to no pass-through of the ruble price changes in to wages. There was also no evidence of a demand-side response, with buyers not posting more "Russian friendly" jobs, suggesting limited cross-side externalities. The key findings—a high extensive margin elasticity but low intensive margin elasticity; little pass-through into wages; and little evidence of a cross-side externality—have implications for market designers with respect to pricing and supply acquisition.
Keywords: No keywords provided
JEL Codes: J01
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Ruble collapse (F31) | Increase in applications sent by Russians (J69) |
| 10% rise in the value of the US dollar (F31) | 14% increase in applications sent by Russians (Y40) |
| Increase in value of US dollar (F31) | Increase in hiring of Russian workers (J69) |
| Ruble collapse (F31) | Increase in hiring of Russian workers (J69) |
| Increase in applications sent by Russians (J69) | Increase in hiring of Russian workers (J69) |
| Ruble collapse (F31) | Decline in wages (J31) |
| Increase in real returns (G19) | Increase in hours worked by Russian workers (J29) |
| Ruble price changes (F31) | Elasticity of average wage (J31) |