Internet Use and Job Search

Abstract

With unemployment levels at record highs, policymakers are struggling to find any means possible to put Americans back to work. In this PAPER, we use the 2007 Computer and Internet Use Supplement of the Census Bureau’s Current Population Survey to estimate the effect of Internet use on job search, and we find this effect to be significant. Our empirical model, which combines multinomial logit and propensity score methods, exploits the distinction between the unemployed and the discouraged, where both desire employment but the latter has ceased active job search due to negative beliefs about the labor market. We find that broadband use at home or at public locations reduces defection from the labor market due to discouragement by over 50 percent (50%). Dialup Internet use also has a statistically significant effect, reducing labor market discouragement by about one-third. These results provide useful insights for policymakers: on the demand-side, our results show that programs to promote Internet use keep the jobless active in job search and may equate to more employment; and, on the supply-side, our results demonstrate that the promotion of shared connections, such as at libraries, in unserved and underserved areas may, in fact, produce substantial societal benefits.

Keywords: Job Search, Employment, Internet, Broadband, Communications, Propensity Score, Labor

JEL Classification: J6, L5, E24, H2