An Example of Negative Wage Elasticity for YouTube Content Creators

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...

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Bibliographic Details
Published in:Journal of economic behavior & organization 2022-11, Vol.203, p.382-400
Main Authors: Barbos, Andrei, Kaisen, Joshua
Format: Article
Language:English
Subjects:
Income Targeting
Negative Wage Elasticity
YouTube
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Summary: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.
ISSN:0167-2681
1879-1751
DOI:10.1016/j.jebo.2022.09.012