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Do informal networks matter in the Ukrainian labor market?

Author

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  • Bilyk Olga
  • Sheron Iuliia

Abstract

This study is aimed at investigating the role of informal networks as a job search method in transition economy. Using the ULMS, a nationally representative survey of Ukrainian population, we investigate whether jobs obtained by means of friends, family or acquaintances' help are different in terms of wages and non-pecuniary benefits comparing to jobs found through formal channels. The results suggest that the effects are not homogenous with respect to gender. These are primarily women obtaining their jobs through informal references who experience wage loss due to the talentscontacts mismatch. At the same time, wage penalties for "connected" men reflect the existence of compensating wage differentials. The supply-side analysis is complemented by the discussion of informal references as one of the most popular recruitment practices among employers.

Suggested Citation

  • Bilyk Olga & Sheron Iuliia, 2012. "Do informal networks matter in the Ukrainian labor market?," EERC Working Paper Series 12/11e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:12/11e
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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