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

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Author Info
Wahba, Jackline (University of Southampton)
Zenou, Yves () (The Research Institute of Industrial Economics)

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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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Publisher 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
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Handle: RePEc:hhs:iuiwop:0629

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Keywords: Education Social Networks Search Methods

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Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Calvó-Armengol, Antoni & Zenou, Yves, 2003. "Job Matching, Social Network and Word-of-Mouth Communication," IZA Discussion Papers 771, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Pissarides, C A, 1979. "Job Matchings with State Employment Agencies and Random Search," Economic Journal, Royal Economic Society, vol. 89(356), pages 818-33, December. [Downloadable!] (restricted)
  3. Holzer, Harry J, 1988. "Search Method Use by Unemployed Youth," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 1-20, January. [Downloadable!] (restricted)
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  4. Topa, Giorgio, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Blackwell Publishing, vol. 68(2), pages 261-95, April.
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  5. Fafchamps, Marcel & Lund, Susan, 2003. "Risk-sharing networks in rural Philippines," Journal of Development Economics, Elsevier, vol. 71(2), pages 261-287, August. [Downloadable!] (restricted)
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  6. Assaad, Ragui, 1997. "Kinship ties, social networks, and segmented labor markets: evidence from the construction sector in Egypt," Journal of Development Economics, Elsevier, vol. 52(1), pages 1-30, February. [Downloadable!] (restricted)
  7. Mortensen, Dale T. & Vishwanath, Tara, 1994. "Personal contacts and earnings : It is who you know!," Labour Economics, Elsevier, vol. 1(2), pages 187-201, March. [Downloadable!] (restricted)
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  8. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
  9. 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. [Downloadable!] (restricted)
  10. 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. [Downloadable!] (restricted)
  11. Gregg, Paul & Wadsworth, Jonathan, 1996. "How Effective Are State Employment Agencies? Jobcentre Use and Job Matching in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 443-67, August.
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  12. 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. [Downloadable!] (restricted)
  13. Calvó-Armengol, Antoni & Verdier, Thierry & Zenou, Yves, 2006. "Strong and Weak Ties in Employment and Crime," CEPR Discussion Papers 5448, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  14. John T. Addison & Pedro Portugal, 2002. "Job search methods and outcomes," Oxford Economic Papers, Oxford University Press, vol. 54(3), pages 505-533, July.
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  15. Barbara Petrongolo & Christopher A. Pissarides, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June. [Downloadable!] (restricted)
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  16. Harry J. Holzer, 1987. "Job search by employed and unemployed youth," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 40(4), pages 601-611, July.
  17. Assaad, Ragui, 1993. "Formal and informal institutions in the labor market, with applications to the construction sector in Egypt," World Development, Elsevier, vol. 21(6), pages 925-939, June. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Battu, Harminder & Seaman, Paul & Zenou, Yves, 2004. "Job Contact Networks and the Ethnic Minorities," Working Paper Series 628, Research Institute of Industrial Economics. [Downloadable!]
    Other versions:
  2. Jellal, Mohamed & Zenou, Yves, 2005. "Ethnic Diversity, Market Structure and Risk Sharing in Developing Countries," CEPR Discussion Papers 5366, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  3. Patrick Bayer & Stephen L. Ross, 2006. "Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application," Working papers 2006-13, University of Connecticut, Department of Economics. [Downloadable!]
    Other versions:
  4. Selod, Harris & Zenou, Yves, 2005. "City Structure, Job Search and Labour Discrimination. Theory and Policy Implications," CEPR Discussion Papers 5009, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Giorgio Topa & Stephen Ross & Patrick Bayer, 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 05-23, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
    Other versions:
  6. Martin Kahanec & Mariapia Mendola, 2007. "Social Determinants of Labor Market Status of Ethnic Minorities in Britain," IZA Discussion Papers 3146, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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