The Impact of Welfare and Labour Market Institutions on Informal Recruitment in European Youth Labour Markets

Abstract

Youth labour markets where informal recruitment practices predominate are likely to amplify existing inequalities among young job seekers. Whereas most literature on informal recruitment focuses on characteristics of individual job seekers and the nature of the jobs they obtain, this article suggests to relate this important issue to overarching dynamics of welfare and labour market institutions. Analyses of survey data among young people with a history of longer-term unemployment in eight European countries suggest that comprehensive welfare state arrangements may substitute for the importance of personal network resources in the job search process. Thus the welfare state may intervene by providing active measures to facilitate the job-matching process and by providing economic means to make young people less dependent on their social network. The level of youth unemployment also seems to be related to the extent of informal recruitment, which is found to be more widespread in the countries with high rates of youth unemployment.

Connecting Employers and Workers: Can Recommendations from the Public Employment Service Act as a Substitute for Social Contacts?

“…The presence of public LMIs might reduce the importance of social networks, since they fulfil similar functions by providing information and acting as matchmakers (Bonet et al, 2013; Lee, 2009). Harsløf (2006), for example, demonstrates that in countries with encompassing welfare state arrangements, social networks are less important for job searches, as the former facilitates job-matching processes. The question arises of how employers value information provided by such agencies for their hiring decisions.…”

Risks and Resources: Social Capital among Social Assistance Recipients in Norway

“…Once again we found that it is rather the respondent's human capital, low education and comparatively high unemployment experience, and especially mechanisms of welfare dependency, that seem to be the driving force behind paths leading individuals into social assistance recipiency – as previous social assistance recipiency is the strongest predictor of receipt in adulthood. Previous research has found that in countries with efficient welfare systems and close public involvement in management of the labour market, job creation and allocation, network social capital has little or no effect on obtaining jobs for individuals (Barbieri et al 2000; Harsløf 2006). The Norwegian labour market is regulated in a comparatively strict way, and this may help explain the weak effects of social capital on risks of receiving social assistance.…”

Rational Choice Theory in Comparative Sociology

“…The sociology of the labor market is a subfijield that is studied using Rational Choice approaches due to the proximity to economic research, again with Becker's original contribution (Becker 1964) as important driver. One important subfijield here is female labor participation (Hummelsheim and Hirschle 2010), another the integration of young people into the labour market and the level of youth unemployment (Harslof 2006). A third subfijield centers around the efffects of social capital (Gesthuizen and Scheepers 2010), education (Carbonaro 2006;Gesthuizen, van der Meer, and Scheepers 2008;Reimer, Noelke, and Kucel 2008) and continued training (Dieckhofff 2007) on labor market chances, while a forth centers on the "scarring" efffects of unemployment on future labor market integration (Gangl 2006), which exhibits notable cross-country diffferences (Dieckhofff 2011).…”