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Title: The Internet, Job Search, and Worker Mobility

Citation Type: Conference Paper

Publication Year: 2003

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Abstract: The Internet represents a large shock to information flows and the nature of market transactions. This paper focuses on how this shock translates into changes in job search. It is likely that the Internet has both reduced search costs, and altered relativities, such as the returns to different types of search, and the ease with which one can search outside the local labor market. I find that in states that adopted the Internet rapidly, the unemployed have expanded their search activities and reallocated their effort across types of job search. The employed also appear to be searching more (or more successfully), with job-to-job flows increasing. Moreover, the Internet has changed the scope of job searches, as information now flows more freely across regional economies, stimulating greater migration across states. While it can be difficult to disentangle whether changes in state labor markets reflect Internet usage or drive Internet adoption, I find a useful instrument that isolates the causal mechanism: the Internet has diffused in much the same way as past innovations, and hence average state ownership rates of household appliances in 1960 describe Internet adoption patterns over the past decade. Disaggregating my main results, I find that the Internet has had the largest effects on the search behavior and mobility of the young and those with at least some college. Estimates on placebos, such as low-skill workers, show little effect.

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Authors: Stevenson, Betsey

Conference Name: School of Business Faculty Seminar

Publisher Location: Stanford University, Palo Alto, CA

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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