Informal Hiring and Income in the Labor Market

Bridges, William P.; Villemez, Wayne J.

doi:10.2307/2095589

Cited by 266 publications

(150 citation statements)

References 6 publications

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“…Similarly, a larger proportion (ten percentage points) of the former is found in the higher income group. However, these findings were only replicated by a few studies (Corcoran et al, 1980;Staiger, 1990;Wegener 1991;Coverdill, 1994;Jann, 2003), while many others could not detect a wage differential (Lin et al, 1981;Bridges and Villemez, 1986;Marsden and Hurlbert, 1988;Preisendörfer and Voss, 1988;Lin, 1999;Mau and Kopischke, 2001). Some studies (De Graaf and Flap, 1988;Flap and Boxmann, 2001) even find a negative wage effect for social contacts.…”

Section: Introductionmentioning

confidence: 97%

Social Networks and Labour Market Outcomes: The Non-Monetary Benefits of Social Capital

Franzén¹

2006

European Sociological Review

164

116

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. Getting a Job: A Study of Contacts and Careers. University of Chicago Press) that social networks help individuals to find better-paid jobs with a new model, which predicts that networks are helpful with respect to non-pecuniary job characteristics but not concerning the monetary pay-offs. Following Montgomery (Montgomery, J. D. (1992) American Sociological Review, 57, 586-596), our model is a combination of classical job-search theory and the network hypothesis. First, concerning the monetary consequences, we test our hypotheses empirically by analysing the 2001 International Social Survey Programme on social relations and support systems. We show that using social ties is a common job-search strategy in all countries. However, using social networks does not increase the monetary pay-off. Second, we use a sample of 8,000 Swiss university graduates who recently entered the labour market to show that informal job-search channels are beneficial with respect to important non-monetary job characteristics. Thus, graduates who received their jobs through social contacts tended to get jobs that are linked to their educational degree and offer better career perspectives. Furthermore, using personal networks is related to lower search costs. Therefore, the results suggest overall that networks improve the non-pecuniary characteristics but not the monetary pay-offs.

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Section: Introductionmentioning

confidence: 97%

Social Networks and Labour Market Outcomes: The Non-Monetary Benefits of Social Capital

Franzén¹

2006

European Sociological Review

164

116

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“…It appears that about half of all jobs are obtained through contacts (Rees and Shultze [1970], Granovetter [1974], Corcoran, et al [1980]). Moreover, jobs obtained informally are generally associated with higher earnings and more prestigious occupations (Granovetter [1974], Bridges and Villemez [ 1986], Staiger[ 1990])°T he importance of social networks in affecting access to employment immediately suggests that some networks may be far more useful than others in conditioning labor market outcomes.…”

Section: Introductionmentioning

confidence: 99%

Family Networks and Youth Access to Jobs

O’Regan

Quigley

1993

Journal of Urban Economics

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“…Some empirical studies find a wage premium of network search (e.g., Granovetter, 1974, Simon and Warner, 1992, Fernandez, Castilla, and Moore, 2000, Marmaros and Sacerdote, 2002, and Kugler, 2003, 6 while some document a negative effect (e.g., Bentolila, Michelacci, and Suarez, 2004 for both the U.S. and Europe, Pistaferri (1999) in countries such as Finland, Greece, Italy and the United Kingdom; Antoninis (2006) for Egypt). Instead of these two extremes, some studies show that there exist no significant wage effects (e.g., Bridges andVillemez, 1986 andMarsden andGorman, 2001).…”

Section: Summary Of Existing Empirical Studiesmentioning

confidence: 99%

Informal search, bad search?: the effects of job search method on wages among rural migrants in urban China

2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. what are the underlying mechanisms. We empirically examine these issues specifically for rural migrants in urban China, a country where one of the largest domestic migration in human history has occurred over the past decades. We find that there exists a significant wage penalty for those migrant workers who have conducted their search through informal channels, despite their popularity. Our further analysis suggests two potential reasons for the wage penalty: 1) the informal job search sends a negative signal (of workers' inability to successfully find a job in a competitive market) to potential employers, resulting in lower wages; and 2) there exists a trade-off between wages and search efficiency for quicker entry into local labor market. We also find some evidence that the informal job search may lead to low-skilled jobs with lower wages. We do not find strong evidence supporting alternative explanations. Terms of use: Documents in JEL

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Informal Hiring and Income in the Labor Market

Cited by 266 publications

References 6 publications

Social Networks and Labour Market Outcomes: The Non-Monetary Benefits of Social Capital

Social Networks and Labour Market Outcomes: The Non-Monetary Benefits of Social Capital

Family Networks and Youth Access to Jobs

Informal search, bad search?: the effects of job search method on wages among rural migrants in urban China

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