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With a little help from my friends? Quality of social networks, job finding and job match quality

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  • Cappellari, Lorenzo
  • Tatsiramos, Konstantinos

Abstract

This paper studies the effect of network quality on job finding and job match quality using longitudinal data and a direct measure of network quality, which is based on the employment of friendship ties. Various identification strategies provide robust evidence that a higher number of employed contacts increases the job finding rate. Network quality also increases wages for high-skilled workers forming networks with non-familial contacts. Instead, for low-skilled workers, more employed familial contacts lead to a negative but not significant effect on wages. These findings reconcile previous mixed evidence of network effects on wages, indicating heterogeneity by skill level and relationship type.

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  • Cappellari, Lorenzo & Tatsiramos, Konstantinos, 2015. "With a little help from my friends? Quality of social networks, job finding and job match quality," European Economic Review, Elsevier, vol. 78(C), pages 55-75.
    • Handle: RePEc:eee:eecrev:v:78:y:2015:i:c:p:55-75
    DOI: 10.1016/j.euroecorev.2015.04.002
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    4. Jingcheng Fu & Martin Sefton & Richard Upward, 2017. "Social comparisons in job search: experimental evidence," Discussion Papers 2017-10, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
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    6. Ruiz-Palazuelos, Sofía & Espinosa, María Paz & Kovářík, Jaromír, 2023. "The weakness of common job contacts," European Economic Review, Elsevier, vol. 160(C).
    7. Adriana Lleras-Muney & Matthew Miller & Shuyang Sheng & Veronica T. Sovero, 2020. "Party On: The Labor Market Returns to Social Networks in Adolescence," NBER Working Papers 27337, National Bureau of Economic Research, Inc.
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    9. Weng, Yulei & Xu, Hao, 2018. "How guanxi affects job search outcomes in China? Job match and job turnover," China Economic Review, Elsevier, vol. 51(C), pages 70-82.
    10. Jiang, Shengjun & Guo, Yilan, 2022. "Reasons for college major-job mismatch and labor market outcomes: Evidence from China," China Economic Review, Elsevier, vol. 74(C).
    11. 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.
    12. Dossè Mawussi DJAHINI-AFAWOUBO, 2023. "Niveau d’éducation et probabilité d’être employé dans le secteur informel au Togo," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 57, pages 29-48.
    13. Rebien, Martina, 2019. "Do social networks mitigate stigma effects from long-term unemployment?," IAB-Discussion Paper 201916, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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    More about this item

    Keywords

    Social contacts; Unemployment; Friendship ties; Wages; Employment stability;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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