Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 10/2019: How Broadband Internet Affects Labor Market Matching

Manudeep Bhuller (), Andreas Kostøl () and Trond Christian Vigtel ()
Additional contact information
Manudeep Bhuller: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Andreas Kostøl: W.P. Carey School of Business, Postal: W.P. Carey School of Business, Arizona State University, 300 E Lemon St, Tempe, AZ 85287, United States
Trond Christian Vigtel: Frisch Centre, Postal: Frisch Centre, Gaustadalleen 21, 0349 Oslo

Abstract: How the internet affects job matching is not well understood due to a lack of data on job vacancies and quasi-experimental variation in internet use. This paper helps fill this gap using plausibly exogenous roll-out of broadband infrastructure in Norway, and comprehensive data on recruiters, vacancies and job seekers. We document that broadband expansions increased online vacancy-postings and lowered the average duration of a vacancy and the share of establishments with unfilled vacancies. These changes led to higher job-finding rates and starting wages and more stable employment relationships after an unemployment-spell. Consequently, our calculations suggest that the steady-state unemployment rate fell by as much as one-fifth.

Keywords: Unemployment; Information; Job Search; Matching

JEL-codes: D83; J63; J64; L86

60 pages, December 19, 2019

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