Networking The Labor Market: Job Searching And Decision-making

Over the last few years, the Internet has attracted increasing academic attention. While significant progress has been made on studying Internet-related issues in the product and monetary markets, fewer research efforts have been contributed to changes occurred in labor market in an Internet environment. Further, current studies mostly take a macro- perspective to analyze the advantages and disadvantages of the Internet-based labor market, as well as specific methods for developing job-sites. In other words, the micro-basis and operations of the emerging, networking labor market are still largely unattended. To fill in such knowledge gap, this paper borrows theoretical models from labor economics, and makes necessary modifications, to analyze the impact of the Internet on one of the key issues in the labor market, namely, the searching and decision-making process of the job seekers.Specifically, this paper introduces the Worker Search Model and collects relevant data to illustrate different cost structures for traditional and online job search. Such structural differences, in turn, may result in different job search behavior. Moreover, the significantly lower costs associated with online job search are likely to raise job seekers' expected income, leading to a more intensive degree of job search. However, the total time spent on online job search will still be relatively reduced, mainly due to the advantages of the Internet in speeding up the search process. Consequently, the penetration of the Internet may improve the efficiency of the labor market.