IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v178y2019icp82-85.html
   My bibliography  Save this article

Informal job search through social networks and vacancy creation

Author

Listed:
  • Merlino, Luca Paolo

Abstract

In this paper I study the interaction between firms’ decisions to open vacancies and workers’ investment in social networks to find jobs. The transmission of information in the network generates positive search externalities so that in equilibrium vacancy creation and socialization are strategic complements. Despite this, there is a unique interior stable equilibrium.

Suggested Citation

  • Merlino, Luca Paolo, 2019. "Informal job search through social networks and vacancy creation," Economics Letters, Elsevier, vol. 178(C), pages 82-85.
    • Handle: RePEc:eee:ecolet:v:178:y:2019:i:c:p:82-85
    DOI: 10.1016/j.econlet.2019.03.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S016517651930076X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2019.03.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Calvo-Armengol, Antoni & Zenou, Yves, 2005. "Job matching, social network and word-of-mouth communication," Journal of Urban Economics, Elsevier, vol. 57(3), pages 500-522, May.
    2. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-452, June.
    3. Arbex, Marcelo & Caetano, Sidney & O’Dea, Dennis, 2016. "The implications of labor market network for business cycles," Economics Letters, Elsevier, vol. 144(C), pages 37-40.
    4. Andrea Galeotti & Luca Paolo Merlino, 2014. "Endogenous Job Contact Networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(4), pages 1201-1226, November.
    5. Howitt, Peter & McAfee, R Preston, 1987. "Costly Search and Recruiting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 89-107, February.
    6. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    7. Galenianos, Manolis, 2014. "Hiring through referrals," Journal of Economic Theory, Elsevier, vol. 152(C), pages 304-323.
    8. Fontaine, Francois, 2007. "A simple matching model with social networks," Economics Letters, Elsevier, vol. 94(3), pages 396-401, March.
    9. Merlino, Luca Paolo, 2014. "Formal and informal job search," Economics Letters, Elsevier, vol. 125(3), pages 350-352.
    10. Markus Kinateder & Luca Paolo Merlino, 2017. "Public Goods in Endogenous Networks," American Economic Journal: Microeconomics, American Economic Association, vol. 9(3), pages 187-212, August.
    11. Horvath, Gergely & Zhang, Rui, 2018. "Social network formation and labor market inequality," Economics Letters, Elsevier, vol. 166(C), pages 45-49.
    12. Andrea Galeotti & Sanjeev Goyal, 2010. "The Law of the Few," American Economic Review, American Economic Association, vol. 100(4), pages 1468-1492, September.
    13. Andrea Galeotti & Luca Paolo Merlino, 2014. "Endogenous Job Contact Networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 1201-1226, November.
    14. Peter Howitt & R. Preston McAfee, 1988. "Stability of Equilibria with Externalities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(2), pages 261-277.
    15. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
    16. Cabrales, Antonio & Calvó-Armengol, Antoni & Zenou, Yves, 2011. "Social interactions and spillovers," Games and Economic Behavior, Elsevier, vol. 72(2), pages 339-360, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gergely Horváth & Rui Zhang, 2022. "The impact of social networking on labor market participation," Bulletin of Economic Research, Wiley Blackwell, vol. 74(1), pages 278-290, January.
    2. Ugo Bolletta & Luca Paolo Merlino, 2022. "Marriage Through Friends," Dynamic Games and Applications, Springer, vol. 12(4), pages 1046-1066, December.
    3. Markus Kinateder & Luca Paolo Merlino, 2021. "The Evolution of Networks and Local Public Good Provision: A Potential Approach," Games, MDPI, vol. 12(3), pages 1-12, July.
    4. Moreno Galbis, Eva & Wolff, Francois-Charles & Herault, Arnaud, 2020. "How helpful are social networks in finding a job along the economic cycle? Evidence from immigrants in France," Economic Modelling, Elsevier, vol. 91(C), pages 12-32.
    5. Yannis M. Ioannides, 2022. "Endogenous Social Networks And Inequality In An Intergenerational Setting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(4), pages 1691-1715, November.
    6. Sebastiano Della Lena & Luca Paolo Merlino, 2021. "Group Identity, Social Learning and Opinion Dynamics," Papers 2110.07226, arXiv.org, revised May 2022.
    7. Hong, Jieying & Zhang, Rui, 2021. "Socialization, job search and integration," Economic Modelling, Elsevier, vol. 101(C).
    8. Kinateder, Markus & Merlino, Luca Paolo, 2022. "Local public goods with weighted link formation," Games and Economic Behavior, Elsevier, vol. 132(C), pages 316-327.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Merlino, Luca Paolo, 2014. "Formal and informal job search," Economics Letters, Elsevier, vol. 125(3), pages 350-352.
    2. Andrea Galeotti & Luca Paolo Merlino, 2014. "Endogenous Job Contact Networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(4), pages 1201-1226, November.
    3. Moreno Galbis, Eva & Wolff, Francois-Charles & Herault, Arnaud, 2020. "How helpful are social networks in finding a job along the economic cycle? Evidence from immigrants in France," Economic Modelling, Elsevier, vol. 91(C), pages 12-32.
    4. Kinateder, Markus & Merlino, Luca Paolo, 2022. "Local public goods with weighted link formation," Games and Economic Behavior, Elsevier, vol. 132(C), pages 316-327.
    5. Arbex, Marcelo & Caetano, Sidney & O’Dea, Dennis, 2016. "The implications of labor market network for business cycles," Economics Letters, Elsevier, vol. 144(C), pages 37-40.
    6. Vincent Boucher & Marion Gousse, 2019. "Wage Dynamics and Peer Referrals," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 1-23, January.
    7. Vincent Boucher & Marion Gousse, 2019. "Wage Dynamics and Peer Referrals," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 1-23, January.
    8. Ugo Bolletta & Luca Paolo Merlino, 2022. "Marriage Through Friends," Dynamic Games and Applications, Springer, vol. 12(4), pages 1046-1066, December.
    9. Stupnytska, Yuliia & Zaharieva, Anna, 2015. "Explaining U-shape of the referral hiring pattern in a search model with heterogeneous workers," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 211-233.
    10. Horváth, Gergely, 2014. "Occupational mismatch and social networks," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 442-468.
    11. Markus Kinateder & Luca Paolo Merlino, 2021. "The Evolution of Networks and Local Public Good Provision: A Potential Approach," Games, MDPI, vol. 12(3), pages 1-12, July.
    12. Yoshitaka Ogisu, 2022. "Referral Hiring and Social Network Structure," Papers 2201.06020, arXiv.org, revised Aug 2022.
    13. Hong, Jieying & Zhang, Rui, 2021. "Socialization, job search and integration," Economic Modelling, Elsevier, vol. 101(C).
    14. Yoske Igarashi, 2016. "Distributional effects of hiring through networks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 20, pages 90-110, April.
    15. Patrick Allmis & Luca Paolo Merlino, 2023. "Homophily and Specialization in Networks," Papers 2312.00457, arXiv.org.
    16. Gergely Horváth & Rui Zhang, 2022. "The impact of social networking on labor market participation," Bulletin of Economic Research, Wiley Blackwell, vol. 74(1), pages 278-290, January.
    17. Manolis Galenianos, 2016. "Referral networks and inequality," 2016 Meeting Papers 1173, Society for Economic Dynamics.
    18. Dariel, Aurelie & Riedl, Arno & Siegenthaler, Simon, 2021. "Referral hiring and wage formation in a market with adverse selection," Games and Economic Behavior, Elsevier, vol. 130(C), pages 109-130.
    19. Yves Zenou, 2015. "A Dynamic Model of Weak and Strong Ties in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 891-932.
    20. Buhai, I. Sebastian & van der Leij, Marco J., 2023. "A Social Network Analysis of Occupational Segregation," Journal of Economic Dynamics and Control, Elsevier, vol. 147(C).

    More about this item

    Keywords

    Job search; Endogenous job contact network; Vacancy creation;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:178:y:2019:i:c:p:82-85. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.