Transitions in a West African Labour Market: The Role of Social Networks

This paper sheds light on the role of social networks in the dynamics of a West African labour market, i.e. in the transitions from unemployment to employment, from wage employment to self-employment, and from self-employment to wage employment. It investigates the effects of three dimensions of the social network on these transitions: its structure, the strength of ties and the resources embedded in the network. For this purpose, we use a first-hand survey conducted in Ouagadougou on a representative sample of 2000 households. Using event history data and very detailed information on social networks, we estimate proportional hazard models for discrete-time data. We find that social networks have a significant effect on the dynamics of workers in the labour market and that this effect differs depending on the type of transition and the considered dimension of the social network. The network size appears to not matter much in the labour market dynamics. Strong ties however play a stabilizing role by limiting large transitions. Their negative effect on transitions is reinforced when they are combined with high level of resources embedded in the network.