Who benefits from better Internet connectivity? Evidence from the labor market in South Africa
I study how expansion of fast Internet availability affect job outcomes and the extent to which online job information can substitute for social networks. I use a two-way fixed effects identification strategy with continuous treatment at district level, and find that Internet availability has a positive impact on average employment and total income. Jobseekers are more inclined to search for job information online with increased access, while their reliance on social networks remains unchanged. The study also finds that young workers tend to search more through both online and network channels, suggesting that personal connections could complement internet job searching for some individuals. Workers without a primary education are discouraged from searching online and have worse employment outcomes. Constraints on effective uses of Internet job search and Internet activities, such as social networking, could help explain the results.