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Job Search Channels, Neighborhood Effects, and Wages Inequality in Developing Countries: The Colombian Case

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  • Catia Nicodemo
  • Gustavo Adolfo García

Abstract

type="main"> This paper analyzes the relationship between social networks and the probability of finding a job. We explore geographic closeness as the social interaction to explain the job search function. Using data from Colombia in 2009, we calculate how neighborhoods have an effect on the channel used to find a job (social network versus no social network). In addition, we study how wage premium relates to using a social network in finding a job, exploring the inequality that can arise using a different job search method. Our results show that neighborhood affects the individual's job search method and that referred workers earn less at the bottom of the wage distribution with respect to non-referred workers. Colombia presents persistent high levels of informality and inequality with the existence of spatial clusters that impose important social and economic costs with strong informational asymmetries on the job market.

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  • Catia Nicodemo & Gustavo Adolfo García, 2015. "Job Search Channels, Neighborhood Effects, and Wages Inequality in Developing Countries: The Colombian Case," The Developing Economies, Institute of Developing Economies, vol. 53(2), pages 75-99, June.
  • Handle: RePEc:bla:deveco:v:53:y:2015:i:2:p:75-99
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    Cited by:

    1. Gustavo Adolfo García, 2016. "Agglomeration Economies in the Presence of an Informal Sector. The Colombian Case," DOCUMENTOS CEDE 014575, UNIVERSIDAD DE LOS ANDES-CEDE.

    More about this item

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J0 - Labor and Demographic Economics - - General

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