The Direct and Indirect Effects of Online Job Search Advice

Abstract We study how online job search advice affects job search behavior and labor market outcomes of unemployed workers. In a large-scale field experiment embedded in the online platform of the Danish public employment service, we provide job seekers with vacancy information and occupational recommendations. Using a two-stage randomized design with regionally varying treatment intensities, we examine both direct effects of advice and treatment spillovers. We find that advice significantly increases employment and earnings when provided to a limited share of job seekers. As treatment intensity rises, these effects diminish and eventually disappear. The decline is driven by negative spillovers among treated job seekers, consistent with increased congestion in the occupations toward which job seekers redirect their search. Spillover effects on untreated job seekers are heterogeneous and depend on how advice alters occupation-specific competition in local labor markets.