Study Finds Internet Job Search Reduces Time Unemployed By 25%

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A new study conducted by professors from University of Colorado and the University of California finds that conducting and Internet job search reduces the time spent unemployed by an average of 25%.

The discovery directly contradicts a 2004 study showing that using the Internet actually prolonged unemployment.

Hani Mansour

Hani Mansour

“In 2004 the researchers came up with two scenarios for their findings – the Internet was not an effective tool or that people who looked on-line for jobs were not as qualified,” said Hani Mansour, Ph.D., assistant professor of economics at the University of Colorado – Denver who conducted the new study with Peter Kuhn, economics professor at the University of California – Santa Barbara.

The sweep and depth of the Internet has also changed dramatically since the late 1990s, Mansour said. The share of young unemployed workers using the web to look for jobs increased from 25% in 1998-2000 to 74% in 2008-2009.

Utilizing the Internet has a large impact on the duration of unemployment especially when used to contact friends and family, essentially to network. A decade ago, Mansour said, people who didn’t have personal contacts used the Internet for their job search to little effect. Today, those using personal contacts online have dramatically increased their chances of finding employment.

Job search websites are better designed, more user friendly and more specific than in the past.

“This hypothesis is certainly consistent with our findings that the Internet is highly effective when used to look at ads, to send out resumes and to fill applications,” the study said. “Simply because the Internet now connects each work to many more firms (and vice versa) in several new and low-cost ways it may be a more powerful tool in the job search process than it was a decade ago.”

Mansour and Kuhn’s study drew on data collected from surveys of young job seekers, asked a series of questions about the methods they used to find employment.

The findings, says Mansour, help solve the puzzling results of the 2004 study showing the Internet increased the time spent unemployed.

“We speculate that significant improvements in technology over this period, ranging from better on-line job sites to network externalities associated with greater overall Internet penetration itself, might explain this change over time,” the study said.

Social media, which essentially began developing as mass-market activity in 2004, has dramatically changed how people find jobs. Twitter, LinkedIn and Facebook have developed into ways to network with others in general or within a specific industry. Just like with old-fashioned networking, online connections often play a role in how a person connects with announcement for an open position, or with the employer themselves.

The number of job boards, especially specific niche job boards, and job search engines has also exploded since 2004.

“What we don’t find is that online job search increases wages compared to the worker’s last job,” Mansour said.

Although internet job searches reduced the duration of unemployment, once the job seeker found a job they weren’t earning more money.

“What we don’t find is that online job search increases wages compared to the worker’s last job,” Mansour said.

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