Does the Internet Increase the Job Finding Rate? Evidence from a Period of Internet Expansion

33 Pages Posted: 17 Sep 2018

See all articles by Manuel Denzer

Manuel Denzer

Johannes Gutenberg University Mainz

Thorsten Schank

University of Erlangen-Nuremberg

Richard Upward

University of Nottingham - School of Economics

Abstract

We examine the impact of household access to the internet on job finding rates in Germany during a period (2006-2009) in which internet access increased rapidly, and job-seekers increased their use of the internet as a search tool. During this period, household access to the internet was almost completely dependent on connection to a particular technology (DSL). We therefore exploit the variation in connection rates across municipalities as an instrument for household access to the internet. OLS estimates which control for differences in individual and local area characteristics suggest a job-finding advantage of about five percentage points.The IV estimates are substantially larger, but much less precisely estimated. However, we cannot reject the hypothesis that, conditional on observables, residential computer access with internet was as good as randomly assigned with respect to the job-finding rate. The hypothesis that residential internet access helped job-seekers find work because of its effect on the job search process is supported by the finding that residential internet access greatly increased the use of the internet as a search method. We find some evidence that household access to the internet reduced the use of traditional job search methods, but this effect is outweighed by the increase in internet-based search methods.

Keywords: job search, unemployment, job finding rate, internet, DSL

JEL Classification: J64, C26, L86

Suggested Citation

Denzer, Manuel and Schank, Thorsten and Upward, Richard, Does the Internet Increase the Job Finding Rate? Evidence from a Period of Internet Expansion. IZA Discussion Paper No. 11764, Available at SSRN: https://ssrn.com/abstract=3249878

Manuel Denzer (Contact Author)

Johannes Gutenberg University Mainz

Saarstrasse 21
Mainz, D-55099
Germany

Thorsten Schank

University of Erlangen-Nuremberg ( email )

SchloƟplatz 4
Erlangen, DE Bavaria 91054
Germany

Richard Upward

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 115 951 5151 (Phone)
+44 115 951 4159 (Fax)

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