Academic journal article Monthly Labor Review

The `Net and the Labor Market

Academic journal article Monthly Labor Review

The `Net and the Labor Market

Article excerpt

In addition to their impacts on capital stocks and industry production, the Internet and the new economy are having effects on the institutions and functioning of the labor markets. David A. Autor's article, "Wiring the Labor Market," in the Journal of Economic Perspectives analyzes three aspects of the labor market in which the forces of the new economy are likely to have significant consequences.

Job search is likely to become more efficient. There may already be some evidence of this. The index of help-wanted advertising, which usually rises as unemployment falls, has been relatively flat even as the unemployment rate fell to 30year lows in the late-1990s. This is consistent with a shift of the Beveridge curve--a negative relationship between vacancies and joblessness--toward its origin. If job search is indeed becoming more efficient, Autor points out that labor market theory predicts an improvement in productivity. As the number of potential matches employers and workers can consider goes up, the "reservation match quality" rises on both sides of the table.

There may also be changes in the way labor services are delivered, according to Autor. "Remote access to e-mail and company documents will enable many workers to perform some or all of their work from home or elsewhere." One efficiency gain from such remote locations is that unproductive commute times may be reduced and there is also some evidence that employees who use Internet access at home actually spend more hours working at home without spending less lime working in the office. …

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