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Social Capital and Wages: An Econometric Evaluation of Social Networking's Effects

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  • Eric Delattre
  • Mareva Sabatier

Abstract

The goal of this paper is to get an econometric evaluation of the effects of the social network's mobilization, as a job search strategy, on wages. We make use of switching regression models to deal simultaneously with an endogenous selection issue in the network's choice and the existence of two different regimes of wage determination. Econometric estimates provide evidence for the existence of a selection effect on the choice of network but, after correcting the selection bias on the wage equations, the effect of social network on wages is negative. Copyright 2007 The Authors; Journal compilation 2007 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..

Suggested Citation

  • Eric Delattre & Mareva Sabatier, 2007. "Social Capital and Wages: An Econometric Evaluation of Social Networking's Effects," LABOUR, CEIS, vol. 21(2), pages 209-236, June.
  • Handle: RePEc:bla:labour:v:21:y:2007:i:2:p:209-236
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    Citations

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    Cited by:

    1. Zaharieva, Anna, 2013. "Double Matching: Social Contacts in a Labour Market with On-the-Job Search," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79891, Verein für Socialpolitik / German Economic Association.
    2. Stupnytska, Yuliia, 2015. "Asymmetric information in a search model with social contacts," Center for Mathematical Economics Working Papers 548, Center for Mathematical Economics, Bielefeld University.
    3. Nicoletta Berardi, 2013. "Social networks and wages in Senegal’s labor market," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-26, December.
    4. Valentina Meliciani & Debora Radicchia, 2014. "Informal Network, Spatial Mobility and Overeducation in the Italian Labour Market," Working Papers 19, Birkbeck Centre for Innovation Management Research, revised Nov 2014.
    5. Yogo, Urbain Thierry, 2011. "Social Network and Job Quality: Evidence from Cameroon," MPRA Paper 44936, University Library of Munich, Germany.
    6. Michele Mosca & Francesco Pastore, 2009. "Wage Effects of Recruitment Methods: The Case of the Italian Social Service Sector," AIEL Series in Labour Economics,in: Marco Musella & Sergio Destefanis (ed.), Paid and Unpaid Labour in the Social Economy. An International Perspective, edition 1, chapter 8, pages 115-141 AIEL - Associazione Italiana Economisti del Lavoro.
    7. Emanuela Ghignoni, 2016. "The ‘great escape’ from Italian Universities: Do labour market recruitment channels matter?," QUADERNI DI ECONOMIA DEL LAVORO, FrancoAngeli Editore, vol. 2016(106), pages 49-75.
    8. Valentina Meliciani & Debora Radicchia, 2016. "Informal networks, spatial mobility and overeducation in the Italian labour market," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(2), pages 513-535, March.
    9. Zaharieva, Anna, 2013. "Social welfare and wage inequality in search equilibrium with personal contacts," Labour Economics, Elsevier, vol. 23(C), pages 107-121.
    10. Rafael Rucha, 2011. "Hat eine freiwillige Mitgliedschaft in Berufsverbänden einen Effekt auf das Einkommen von Freiberuflern? – Eine Panelanalyse für Deutschland," FFB-Discussionpaper 94, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
    11. Trockel, Walter, 2014. "Robustness of intermediate agreements for the discrete Raiffa solution," Games and Economic Behavior, Elsevier, vol. 85(C), pages 32-36.
    12. Long, Wenjin & Appleton, Simon & Song, Lina, 2013. "Job Contact Networks and Wages of Rural-Urban Migrants in China," IZA Discussion Papers 7577, Institute for the Study of Labor (IZA).
    13. Zaharieva, Anna, 2015. "Social contacts and referrals in a labor market with on-the-job search," Labour Economics, Elsevier, vol. 32(C), pages 27-43.
    14. Zaharieva, Anna, 2015. "On the Puzzle of Diversification in Social Networks with Occupational Mismatch," Center for Mathematical Economics Working Papers 547, Center for Mathematical Economics, Bielefeld University.
    15. Eva Arceo, 2010. "Job Search, Social Interactions and Labor Market Performance of Low-Skilled Immigrants," Working papers DTE 489, CIDE, División de Economía.
    16. Ralf Werner Koßmann, 2016. "Effectiveness of Social Capital in the Job Search Process," SOEPpapers on Multidisciplinary Panel Data Research 823, DIW Berlin, The German Socio-Economic Panel (SOEP).
    17. Stupnytska, Yuliia & Zaharieva, Anna, 2015. "Explaining U-shape of the referral hiring pattern in a search model with heterogeneous workers," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 211-233.
    18. Stupnytska, Yuliia & Zaharieva, Anna, 2015. "Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers," Center for Mathematical Economics Working Papers 511, Center for Mathematical Economics, Bielefeld University.
    19. LIU Yang, 2015. "The Role of Individual Social Capital in Wage Determination: Evidence from China," Discussion papers 15133, Research Institute of Economy, Trade and Industry (RIETI).
    20. Dang, Duc Anh, 2015. "Social Networks and Employment Performances: Evidence from Rural – Urban Migration in Vietnam," MPRA Paper 67479, University Library of Munich, Germany.
    21. repec:eee:labeco:v:50:y:2018:i:c:p:112-127 is not listed on IDEAS
    22. repec:bla:intmig:v:51:y:2017:i:1:p:251-286 is not listed on IDEAS
    23. Emanuela Ghignoni, 2017. "Who do you know or what do you know? Informal recruitment channels, family background and university enrolments," Working Papers 179, University of Rome La Sapienza, Department of Public Economics.
    24. Araujo, Luis & Minetti, Raoul, 2011. "Knowledge sharing and the dynamics of social capital," European Economic Review, Elsevier, vol. 55(8), pages 1109-1119.

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