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Network Search: Climbing The Job Ladder Faster

Author

Listed:
  • Marcelo Arbex
  • Dennis O'Dea
  • David Wiczer

Abstract

We introduce an irregular network structure into a model of frictional, on‐the‐job search in which workers find jobs through their network connections or directly from firms. We show network‐found jobs have higher wages, and thus better‐connected workers climb the job ladder faster. The mean field approach allows us to formulate heterogeneous workers' recursive problem tractably. Our calibration is consistent with several empirical findings because of a composition—not information—effect. We also introduce new model‐consistent evidence: Job‐to‐job switches at higher ladder rungs are more likely to use networks.

Suggested Citation

  • Marcelo Arbex & Dennis O'Dea & David Wiczer, 2019. "Network Search: Climbing The Job Ladder Faster," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(2), pages 693-720, May.
    • Handle: RePEc:wly:iecrev:v:60:y:2019:i:2:p:693-720
    DOI: 10.1111/iere.12375
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    Citations

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    Cited by:

    1. Jake Bradley, 2025. "Worker-Firm Screening and the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 57, July.
    2. Youze Lang & Youzhi Yang, 2024. "An Equilibrium Labor Market Model With Internal And External Referrals," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(2), pages 655-692, May.
    3. Lukas Bolte & Nicole Immorlica & Matthew O. Jackson, 2020. "The Role of Referrals in Immobility, Inequality, and Inefficiency in Labor Markets," Papers 2012.15753, arXiv.org.
    4. Martina Rebien & Michael Stops & Anna Zaharieva, 2020. "Formal Search And Referrals From A Firm'S Perspective," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(4), pages 1679-1748, November.
    5. Benjamin Lester & David A. Rivers & Giorgio Topa, 2021. "The Heterogeneous Impact of Referrals on Labor Market Outcomes," Working Papers 21-34, Federal Reserve Bank of Philadelphia.
    6. Moon, Ji-Woong, 2023. "Strategic referrals and on-the-job search equilibrium," Journal of Monetary Economics, Elsevier, vol. 134(C), pages 135-151.
    7. Forsythe, Eliza & Wu, Jhih-Chian, 2021. "Explaining Demographic Heterogeneity in Cyclical Unemployment," Labour Economics, Elsevier, vol. 69(C).
    8. R. Jason Faberman & Andreas I. Mueller & Ayşegül Şahin & Giorgio Topa, 2022. "Job Search Behavior Among the Employed and Non‐Employed," Econometrica, Econometric Society, vol. 90(4), pages 1743-1779, July.
    9. André, Keven R.A. & Arbex, Marcelo & Corrêa, Márcio V., 2023. "The economic implications of a network SIR-Macro model of epidemics," Economics Letters, Elsevier, vol. 225(C).
    10. Michael Neugart & Anna Zaharieva, 2025. "Social networks, promotions, and the glass‐ceiling effect," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 34(2), pages 370-402, May.
    11. Bradley, Jake, 2022. "Worker-Firm Screening and the Business Cycle," IZA Discussion Papers 15017, Institute of Labor Economics (IZA).
    12. Jamelia Harris, 2025. "Political Patronage and the Labour Market Experience of High-Skilled Workers: Mixed Methods Evidence from Sierra Leone," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 37(1), pages 241-262, February.
    13. Jake Bradley, 2020. "Worker-firm screening and the business cycle," Discussion Papers 2020/11, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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