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EXPANDING OPPORTUNITIES
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The internet makes labor markets more efficient
by connecting a larger pool of individuals and firms at
lower cost. 56 Indeed.com, Monster.com, and elempleo
.com are international platforms that aggregate job
vacancies from different sources and allow firms to
post job openings, and workers to apply for jobs and
post résumés. Similar services exist for local markets,
such as aldaba.com in the Dominican Republic and
kariyer.net in Turkey. Social and professional networking
sites also provide information on potential
workers, often on behavioral aspects and social ties
not reflected in traditional resumes. LinkedIn, the
largest online professional network, has more than
310 million registered members, 67 percent outside
the United States. In Brazil, LinkedIn’s penetration
rate is already at 8 percent. 57 In most countries, online
job search remains concentrated among youth and
the best educated and grows with income: online job
search among the employed and unemployed is above
20 percent in urban Armenia and Georgia, but below
5 percent in urban Bolivia, Ghana, the Lao People’s
Democratic Republic, Sri Lanka, and Vietnam. 58
Online job boards, social media, and matching
platforms can improve labor market efficiency, especially
in developing countries and in the informal
sector, where information failures are large. Online
job matching is cheaper and faster than traditional
methods. 59 In Peru, integrating mobile phones into
traditional public intermediation services increased
employment among job seekers by 8 percentage
points in the short term. 60 In Germany, online job
seekers are better matched to jobs, are happier with
work, and have higher chances of promotion and job
security. 61 But other studies find no effect of online
tools on the speed of matching or on the length of
unemployment. 62 The large number of applications
per vacancy and stale resumes and job posts makes it
costly for employers to select workers and for workers
to find available jobs. As online tools become more
advanced, however, matching is becoming more
effective. In the United States, the average unemployment
duration for internet searchers was 25 percent
shorter than for noninternet searchers, reversing
earlier results. 63
Online tools can address many labor market frictions,
but much of this potential remains unrealized.
A first challenge is reaching lower-skilled workers.
Some services, such as Souktel, are solving this via
mobile phone (box 2.5). Babajob in India and Duma
in Kenya have also implemented innovations to
reach the bottom of the pyramid. They use text messaging
and “missed calls” to connect low-skilled and
informal workers to vacancies. A second challenge is
Figure 2.9 Returns to education remain high despite
significant expansion in the supply of educated
workers, especially for tertiary education
Average return to one additional year of education in tertiary education
Percent
25
20
15
10
5
0
2004 2005 2006 2007 2008 2009 2010 2011 2012
Women, low- and middle-income countries
Men, low- and middle-income countries
Women, high-income countries
Men, high-income countries
Source: WDR 2016 team, based on Montenegro and Patrinos 2014. Data at http://bit.do
/WDR2016-Fig2_9.
Note: Includes 97 countries and only wage employees. The regressions control for potential experience
and potential experience squared using individuals’ age.
Figure 2.10 Returns to education
are particularly high in ICT-intensive
occupations
Wage premium, beyond returns to education, for working in
an ICT-intensive occupation
Percent
6
5
4
3
2
1
0
Low- and middle-income
countries
Women
High-income countries
Men
Source: WDR 2016 team, based on Monroy-Taborda, Moreno, and Santos,
forthcoming, for the WDR 2016. Data at http://bit.do/WDR2016-Fig2_10.
Note: An ICT-intensive occupation scores 4 or higher in an index between 0
(no use of technology at work) and 6 (most use of technology at work).
ICT = information and communication technology.