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Network Matching Efficiency along the Economic Cycle: Direct and Indirect Ties

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Abstract

There is a large consensus in the literature on the major role of social networks as a helpful instrument to find a job. In this paper, we study the social network matching rate along the economic cycle both from a theoretical and empirical perspective. Using the French Labor Force Survey for the period 2003-2012, we find that the relationship between the network matching rate based on direct ties and the job finding rate is decreasing and convex as predicted by our theoretical setup. Results are completely modified when we consider a measure of the network matching rate based on indirect ties related to the share of peers in a job. In this case, we find a linearly increasing relation between the network matching rate and the job finding rate. This underlines not only the heterogeneous ways through which network membership may influence the individuals’ performance on the labor market, but also the different behaviors of these driving factors along the economic cycle.

Suggested Citation

  • Arnaud Herault & Eva Moreno Galbis & Francois-Charles Wolff, 2018. "Network Matching Efficiency along the Economic Cycle: Direct and Indirect Ties," AMSE Working Papers 1832, Aix-Marseille School of Economics, France.
    • Handle: RePEc:aim:wpaimx:1832
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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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