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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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    2. Thibaud Deguilhem & Jean-Philippe Berrou & François Combarnous, 2019. "Using your ties to get a worse job? The differential effects of social networks on quality of employment in Colombia," Review of Social Economy, Taylor & Francis Journals, vol. 77(4), pages 493-522, October.
    3. Gustavo A. García, 2019. "Agglomeration economies in the presence of an informal sector: the Colombian case," Revue d'économie régionale et urbaine, Armand Colin, vol. 0(2), pages 355-388.
    4. Anandi Mani & Emma Riley, 2019. "Social networks, role models, peer effects, and aspirations," WIDER Working Paper Series wp-2019-120, World Institute for Development Economic Research (UNU-WIDER).
    5. Magaly Faride Herrera Giraldo & Carlos Giovanni González Espitia, 2022. "Understanding the Spatial Relationship Between the Informal Labor Market and Violent Crime in Cali, Colombia," Icesi Economics Working Papers 20344, Universidad Icesi.
    6. Mbulaheni Albert Dagume, 2021. "Determinants of the Job Search Method among Rural Youth: The Case of Vhembe District in South Africa," International Journal of Economics and Financial Issues, Econjournals, vol. 11(5), pages 28-36.

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    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 - Political Economy and Comparative Economic Systems - - Socialist 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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