The Effect of Regional Internet Availability on Unemployment and Vacancy Durations
The emergence of the internet as a mass medium has led to a dramatic decline in the cost of acquiring and disseminating information. In the context of labor markets, one of the major features that are likely to be affected by the internet is the way how workers and employers search for each other and eventually form a match. The goal of the proposed project is to identify the effect of the emergence of the internet on the functioning of labor markets, with a particular focus on search and matching outcomes. A novel feature of our proposed study is that we extend the previous evidence, which has primarily focused on job seekers’ job search behavior, to recruiting and search on behalf of employers. A key challenge in studying the role of the internet on job search, recruiting and matching outcomes is to find exogenous variation in internet availability and/or usage as individuals as well as employers are likely to self-select into different search channels. To address this issue, we plan to adopt the identification strategy put forward by Falck et al (2014). This approach exploits exogenous variation in regional internet availability caused by technological restrictions of the roll-out of the first generation DSL technology in the early 2000s in Germany.