Norges Bank

Working Paper

How broadband internet affects labor market matching

Author:
Manudeep Bhuller, Andreas R. Kostøl and Trond C. Vigtel
Series:
Working Paper
Number:
1/2020

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.

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ISSN 1502-8190 (online)

Published 16 January 2020 13:10
Published 16 January 2020 13:10