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A structural analysis of job search methods and subsequent wages

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  • Koning, Pierre

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Berg, Gerard J. van den
  • Ridder, Geert

Abstract

In most studies on individual labor market transitions, the search process leading to job offers is a black box. In this paper we specify and estimate a search model that distinguishes between formal (applications) and informal (referrals) search methods. Job offers can be obtained by either method, and the corresponding wage offer distributions are allowed to differ. The model allows for search during unemployment as well as search on the job. We conclude that although the method by which jobs are found varies considerably with education and occupation, the use of a particular search method does not result in a higher wage. Moreover, individuals who have an advantage in informal search do not find a job more rapidly, which casts doubt on the hypothesis that the search method is freely chosen by the searcher by comparing costs and returns.

Suggested Citation

  • Koning, Pierre & Berg, Gerard J. van den & Ridder, Geert, 1997. "A structural analysis of job search methods and subsequent wages," Serie Research Memoranda 0036, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  • Handle: RePEc:vua:wpaper:1997-36
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Arceo-Gómez, Eva Olimpia, 2012. "Job Search, Networks, and Labor Market Performance of Immigrants," MPRA Paper 44533, University Library of Munich, Germany.
    2. Krug, Gerhard & Rebien, Martina, 2011. "Job search via social networks : An analysis of monetary and non-monetary returns for low-skilled unemployed," IAB-Discussion Paper 201123, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. repec:zbw:rwirep:0535 is not listed on IDEAS
    4. van der Klaauw, Bas & van Ours, Jan C., 2000. "Labor Supply and Matching Rates for Welfare Recipients: An Analysis Using Neighborhood Characteristics," IZA Discussion Papers 102, Institute of Labor Economics (IZA).
    5. repec:iza:izadps:102 is not listed on IDEAS
    6. Santos, Miguel, 2010. "From Training to Labour Market. Holocletic Model," MPRA Paper 26617, University Library of Munich, Germany.
    7. Markova Kseniya & Roshchin Sergey, "undated". "Choice among Different Job Search Channels. The Evidence from Russian Labor Market," EERC Working Paper Series 04-05e, EERC Research Network, Russia and CIS.
    8. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2005. "Does Job-Search Assistance Affect Search Effort and Outcomes? A Microeconometric Analysis of Public versus Private Search Methods," IZA Discussion Papers 1825, Institute of Labor Economics (IZA).
    9. Somaya Ahmed Aly Abdel-Mowla, 2012. "Females’ Off-the-Job Search Methods in Egypt: Formal versus Informal Search Methods," Jindal Journal of Business Research, , vol. 1(1), pages 21-42, June.
    10. van den Berg, Gerard J, 1999. "Empirical Inference with Equilibrium Search Models of the Labour Market," Economic Journal, Royal Economic Society, vol. 109(456), pages 283-306, June.
    11. van der Klaauw, B. & van Ours, J.C., 1999. "Labor Supply and Matching Rates for Welfare Recipients : An Analysis Using Neighborhood Characterisitics," Discussion Paper 1999-105, Tilburg University, Center for Economic Research.
    12. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2009. "Does the public employment service affect search effort and outcomes?," European Economic Review, Elsevier, vol. 53(7), pages 846-869, October.
    13. Vera A. Adamchik & Josef C. Brada & Arthur E. King, 2009. "Are Transition Economy Workers Underpaid?," Working Papers 278, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    14. Marco Caliendo & Ricarda Schmidl & Arne Uhlendorff, 2011. "Social networks, job search methods and reservation wages: evidence for Germany," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(7), pages 796-824, October.
    15. Bechara, Peggy & Eilers, Lea & Paloyo, Alfredo R., 2015. "In Good Company – Neighborhood Quality and Female Employment," Ruhr Economic Papers 535, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    16. Eva Arceo, 2010. "Job Search, Social Interactions and Labor Market Performance of Low-Skilled Immigrants," Working papers DTE 489, CIDE, División de Economía.
    17. Peggy Bechara & Lea Eilers & Alfredo R. Paloyo, 2014. "In Good Company – Neighborhood Quality and Female Employment," Ruhr Economic Papers 0535, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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    More about this item

    Keywords

    job search; search methods; wages; individual labor market transitions;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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