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Density, Social Networks and Job Search Methods: Theory and Application to Egypt

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  • Wahba, Jackline

    (University of Southampton)

  • Zenou, Yves

    ()
    (The Research Institute of Industrial Economics)

Abstract

The aim of this paper is to study the impact of the size and the quality of social networks on the probability to find a job. We first develop a theoretical model in which individuals are embedded within a network of social relationships. Workers can obtain information about jobs via employed friends belonging to his/her social network. Workers can be either uneducated or educated. We show that, conditional on being employed, the probability to find a job through social networks, relative to other search methods, increases and is concave with the size of the network. The effects are stronger for the uneducated. There is however a critical size of the network above which this probability decreases. We also show that the probability to find a job through friends and relatives decreases with the local unemployment rate. We test empirically these theoretical findings for Egypt using the 1998 Labor Market Survey. The empirical evidence supports the predictions of our theoretical model.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 629.

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Length: 42 pages
Date of creation: 19 Oct 2004
Date of revision:
Handle: RePEc:hhs:iuiwop:0629

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Keywords: Education; Social Networks; Search Methods;

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  1. Mazumdar, Dipak, 1987. "Rural-urban migration in developing countries," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 28, pages 1097-1128 Elsevier.
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  16. McCormick, Barry & Wahba, Jackline, 2003. "Did public wage premiums fuel agglomeration in LDCs?," Journal of Development Economics, Elsevier, vol. 70(2), pages 349-379, April.
  17. Harry J. Holzer, 1986. "Search Method Use by Unemployed Youth," NBER Working Papers 1859, National Bureau of Economic Research, Inc.
  18. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-55, June.
  19. Kaivan Munshi, 2003. "Networks In The Modern Economy: Mexican Migrants In The U.S. Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(2), pages 549-599, May.
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