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Information Networks in Labor Markets
... Estas opciones se distinguen por el nivel y el tipo de información laboral que permiten circular. En las primeras, hay menos incertidumbre en cuanto a la calidad del empleo y a las características del candidato, mientras que, en las segundas, la información se maneja de manera privilegiada, donde algunas personas pueden tener más y mejor información tanto de empleadores como de potenciales empleados (Méndez, Castro Lugo y Sánchez Mena, 2018;Reid, 1972;Rees, 1966). ...
... Como es el caso de las personas que viven en las zonas marginales de Cali, que también usan sus contactos sociales para conseguir empleo y cuyas características socioeconómicas condicionan sus trayectorias laborales. A saber, en la literatura se encuentra que, la consecución de un empleo está afectada cuando se cuenta con contactos sociales con bajos niveles educativos (Chua, 2011;Mouw, 2003), escasa experiencia laboral (Marsden y Hurlbert, 1988), estar en situación de pobreza (Falcon, 1995) o como lo plantea Lin (1999a), menos favorecidos: mujeres, menos educados y menos calificados; y aunque puede ser un recurso al alcance de todos, de bajo costo tanto para buscadores como empleadores (Falcon, 1995;Rees, 1966), no siempre resultan eficaces para encontrar un empleo o llenar una vacante si los contactos están en la misma situación laboral, es decir, desempleados. ...
... Vale la pena aclarar, que el uso de las redes de contactos sociales en la búsqueda de empleo, como lo muestra la amplia literatura sobre el tema, no es exclusivo de quienes están en situaciones sociales y económicas específicas. Rees (1966) señala la importancia de las alternativas informales, sobre todo, de los vínculos débiles, con quienes se tiene un contacto esporádico y que actúan como puentes para que la información laboral llegue a más personas; argumento que lo refuerza Granovetter (1973) al plantear que este tipo de vínculos son los que permiten que la información llegue de o a otros círculos sociales más allá del propio, de manera que los vínculos débiles poseen información laboral no redundante (Yakubovich, 2005) convirtiéndose en un capital social muy importante cuando se está en la búsqueda de empleo (Vacchiano, Martí, Yepes-Cayuela y Verd, 2018; Bachmann y Baumgarten, 2012; Montgomery, 1991). ...
La búsqueda de empleo usando los contactos sociales a pesar de ser una práctica común, en ocasiones no genera los resultados esperados. Con el objetivo de comprobar lo anterior, en este documento se configuran las redes de contactos sociales de un grupo de jóvenes que viven en contextos de marginalidad y violencia de las comunas 1, 14, 16, 18 y 20 de Cali que participaron en el programa denominado Tratamiento Integral a Pandillas - Jóvenes Sin Fronteras (TIP-JSF), un proceso de intervención psicosocial desde una perspectiva integral que promovía la inclusión social. Las redes de contactos sociales halladas a través de una encuesta se caracterizan por ser pequeñas y cerradas, aumentando la probabilidad de que quienes las conforman, presenten el mismo estado laboral: desempleo o informalidad laboral. Es clave, entonces, que las/os jóvenes amplíen sus contactos para que los vinculen con otros que les puedan brindar información de mejores vacantes laborales.
... Economists and sociologists of work have since multiplied studies to better specify and evaluate them. Rees (1966) in his founding work offers a fruitful reading grid to characterize their diversity. Indeed, it groups them into two categories, namely informal channels, characterized by the good quality of the information made available, and formal channels characterized by a large quantity of information disseminated. ...
... Source: authors, based on Rees (1966). ...
... In the specification drawn up by Rees (1966), ICTs figure among the formal channels of access to employment. Despite the increasing frequent use of ICTs, Mastafi (2016) notes that there is not absolute unanimity on the definition of this concept. ...
Based on ECAM4 (2014) database, this paper aims at analysing the effect of Information and Communication Technologies (ICTs) based on youth’s access employment aged between 15-35 years old in Cameroun. The cases of employees of more than 15 and thos of more than 35 years old are considered for comparisons. In order to solve the endogeneity bias of the simple probit model, a robust instrumental variable probit model was used, and this gave consistent results with regard to the diagnostics based on the specificity/sensitivity tests. The estimates suggest that: (i) using the internet increases the chances of getting a job, and this for all age group considered; (ii) this increase it between 17-38% for youth, 0.39-1.118% for seniors and 18-40% for all workes; (iii) compared to senior employees, the young internet users are 25 times luckier to find a job. Finally, this result is in accordance with the literature which considers ICTs as the most important component of labor market.
... Al respecto de los medios para encontrar empleo y la importancia de las redes de contactos, existe una literatura amplia (Addison & Portugal, 2002;Aguilera, 2002;Bachmann & Baumgarten, 2012;Calvó-Armegol & Jackson, 2004). Una distinción clave al respecto la realizó Rees (1966), al diferenciar los canales de búsqueda de información en formales e informales. La propuesta señala que los medios formales comprenden los servicios estatales de empleo, agencias de colocación, avisos en los periódicos, reuniones sindicales y, departamentos de vinculación escolar; mientras que, los medios informales hacen alusión a referencias de empleados y presentarse directamente en el establecimiento. ...
... Los estudios empíricos apuntan a que cerca del 50 % de los trabajadores encontraron por medio de sus amigos, familiares o conocidos (Loury, 2006;Montgomery, 1991;Rees, 1966). Además, se ha identi cado que quienes obtienen empleo por ese canal regularmente alcanzan mayor antigüedad en las rmas (Loury, 2006). ...
... Una pregunta que puede surgir al evaluar los esquemas más e cientes para encontrar empleo es: ¿El canal de búsqueda cambia por nivel educativo? La tabla 2 con rma lo propuesto por Rees (1966), en el sentido de que alrededor de la mitad de la población encuentra empleo por medio de sus contactos personales y que ello ocurre en todos los niveles educativos. ...
La investigación tiene como objetivo verificar la existencia de disparidades salariales en México a partir del canal de búsqueda de empleo. En este caso, el análisis se centró en las redes de contactos de los individuos, emplea datos de la Encuesta Nacional de Ocupación y Empleo (enoe) del 2019, estimando una ecuación de determinación salarial semilogarítmica. Los resultados exhiben una prima salarial por haber obtenido empleo mediante
Internet (12.4 %), un sindicato (6.7 %), bolsa privada (8.9 %) y contactos personales (6.7 %). Cuando se distingue por edad, se observa que las personas con más de 30 años reportan el mayor impacto positivo de encontrar empleo a través de sus redes de contactos.
... Our hypotheses regarding these customer metrics of managerial interest are informed by prior work in economics and sociology on employee referral (e.g., Coverdill 1998;Rees 1966), especially the work of Fernandez, Castilla, and Moore (2000), Neckerman and Fernandez (2003), and Castilla (2005) on the quality of employee referral programs. These studies show that the benefits of such programs are realized through distinct mechanisms, of which better matching and social enrichment appear particularly relevant to marketers. ...
... Whereas reciprocity and triadic balance imply that referrers are diligent and active in screening and matching peers to firms, homophily implies that customers are likely to refer others who are similar to themselves. Because existing customers have an above-average chance of being a good match (otherwise, they would not be customers), firms may benefit from referral programs through "passive" homophily-based matching rather than only deliberate "active" screening-based matching by referrers (Kornish and Li 2010;Montgomery 1991;Rees 1966). ...
... Therefore, we expect replications and extensions to come from other single-firm studies such as ours and those of Godes andMayzlin (2009), Haenlein (2010), Iyengar, Van den Bulte, and Valente (2011), and Nitzan and Libai (2010). Because the mechanisms of better matching and social enrichment are likely to be more important for complex products with important experience attributes, rather than simple products with 58 / Journal of Marketing, January 2011 mostly search attributes (e.g., Coverdill 1998;Kornish and Li 2010;Rees 1966), studies of multiple products with varying levels of complexity would be especially informative. ...
Referral programs have become a popular way to acquire customers. Yet there is no evidence to date that customers acquired through such programs are more valuable than other customers. The authors address this gap and investigate the extent to which referred customers are more profitable and more loyal. Tracking approximately 10,000 customers of a leading German bank for almost three years, the authors find that referred customers (1) have a higher contribution margin, though this difference erodes over time; (2) have a higher retention rate, and this difference persists over time; and (3) are more valuable in both the short and the long run. The average value of a referred customer is at least 16% higher than that of a nonreferred customer with similar demographics and time of acquisition. However, the size of the value differential varies across customer segments; therefore, firms should use a selective approach for their referral programs.
... One prominent example of how social networks play a role is that social networks can signifi cantly facilitate job search. Studies over the recent decades show that throughout the world at least 30%~50% of job seekers got their jobs through the help of relatives or friends (Rees, 1966;Addison and Portugal, 2002;Wahba and Zenou, 2005;Zhang et al., 2008;Topa, 2011). ...
Based on a survey of migrants in 12 cities across four major urbanizing areas in China, this paper empirically studies the impact of the size of individual social networks on the migrants’ wages. After controlling for potential endogeneity using an instrumental variable approach, our empirical results from 2SLS estimation provides no evidence for significant average causal effect of network size on wage. A further exploration of quantile regression analysis with endogeneity issue managed by using the control function approach shows that a significant positive network size effect can only be found in the low-income end.
... Second, ORU can also help improve performance by addressing a central challenge of hiring: uncertainty (Rees, 1966;Stigler, 1962). Researchers have identified at least three ways ORU in particular improve information for both firms and future employees which in turn, decreases uncertainty. ...
Purpose
The role of family business staffing practices in their ultimate success remains largely unknown. The purpose of this paper is to test the notion that firms with greater family essence manifest their commitment by leveraging referrals as a recruitment source, which in turn is associated with higher performance. The hypothesized model posits that reduced agency costs from hiring through owner referral utilization (ORU) provide high-family essence firms with stronger performance.
Design/methodology/approach
The study draws upon a sample of 194 small and medium-sized family business owners.
Findings
Findings from OLS regression and the PROCESS model in SPSS support the hypothesis that recruiting nonfamily employees from referrals helps lessen agency conflicts and serves as an intervening mechanism in the relationship between family firm essence and firm performance.
Originality/value
This study draws on agency theory to shed light on how family firms successfully bring nonfamily employees into the fold despite their human resource limitations. The results extend theory on family businesses by demonstrating that those with higher degrees of family essence are more likely to attract applicants via ORU. Leveraging this recruiting practice allows family businesses to hire nonfamily employees who share the values and goals of the family firm, thus lowering agency costs and fostering higher performance. More broadly, the findings offer insight into the role of staffing practices in family firm success.
... Mouw (2002) proposes that networks may be a relatively efficient method of job search for groups that are under the risk of discrimination when using non-network channels. This is because social network ties act as intermediaries that reduce uncertainty about applicants, and hence a risk of (statistical) discrimination (Mouw, 2002;Rees, 1966). 4 More recently, researchers have argued that also formal institutions can act as an intermediary and that a key differentiating factor among channels is not the formality, but whether there is any type of intermediary (Brinbaum, 2022;Marchal, et al., 2007). ...
Research has found persistent difficulties in labour market entrance for descendants of immigrants in several advanced economies. This paper tests whether social capital contributes to this disadvantage or whether it is a factor that compensates for possible discrimination in non-network hirers. The paper analyses the school-to-work transition of descendants of immigrants and their native background counterparts in Sweden using the CILS4EU survey, which provides information on friendship ties measured at age 15 and labour market outcomes at age 19. This allows for an analysis of networks formed before labour market entrance, an assessment of the impact of differential sorting into schools, and an analysis of reciprocated friendship relations. Results show that descendants of immigrants have access to less social capital measured as employed friends. Still, descendants of immigrants are as likely as natives to use their contacts to obtain a job, and the employment returns to social capital are larger. In addition, results reveal that social capital inequality is larger for reciprocated friendship ties as compared to standard measures of outgoing nominations. The study concludes that social capital is a compensating factor for descendants of immigrants, but only for those with access to high quality social capital.
... Granovetter (1974) goes a little further, and argues that the network of contacts can explain to a greater extent the achievement of a job, even more than the same traditionalist theories that make references to human capital; that is, those that have to do with the accumulation of productive capacities such as years of education. Authors such as Rees (1966), Mcentarfer (2002) and Montgomery (1991) argue that employers often use personal networks in employee selection processes, especially those that derive from recommendations from their own employees, particularly the most productive; as they infer that the recommended people, due to the fact of belonging to the social circle of a productive worker, will also have high levels of productivity. ...
Objetivos: en este artículo se estudian los principales canales de búsqueda de empleo en Neiva, ciudad caracterizada por tener la mayor tasa de desempleo de Colombia. El propósito fundamental es analizar los factores que se relacionan con el uso de canales formales e informales de búsqueda de empleo en Neiva. Metodología: para lograrlo, se estimó un modelo econométrico de variable dependiente limitada Probit, teniendo en cuenta características demográficas, laborales y socioeconómicas que puedan incidir en la elección del medio de búsqueda de empleo. Resultados: dentro de los principales resultados se destaca que, a mayores niveles educativos, mayor es la probabilidad de acceder a un empleo a través de un canal de búsqueda formal, así mismo, a mayores estratos socioeconómicos, menor es la probabilidad de encontrar empleo a través de canales formales. Conclusión: los individuos con condiciones socioeconómicas más favorables, generalmente hacen parte de redes de contactos más amplias, que les permiten acceder al mercado laboral de manera más fácil, a través de los canales informales de búsqueda de empleo.
... These seem to be true in China: users of information ties enjoy an average advantage of 40.1% ([℮ .337 2 1] 3 100%) than non-guanxi users. On the other hand, in-group favoritism dictates that relatives and close friends expect preferential treatments to each other (Taylor & Doria, 1981), and therefore employers not only accept referrals of old-boy networks (Rees, 1966) but also try to impress them by offering the new hires a higher entry-level wage (Simon & Warner, 1992). In the Chinese context, wage offers are oftentimes flexible, especially in the growing non-state sector, thus creating a social space in which guanxi ties influence hiring decisions. ...
... For instance, individuals' position in their network structure can provide invaluable resources and may be a source of status for individuals (Burt, 1982;Freeman, 1978;Podolny & Baron, 1997). Further, individuals' network position can yield additional workrelevant benefits such as obtaining advice or job leads and referrals (McDonald & Westphal, 2003;Rees, 1966). In all, ample scholarship suggests that social networks, structurally and functionally, provide individuals with resources and social support that can lead to a slew of positive outcomes, including career advancements, enhanced creativity, and wellbeing (Brass, 1995;Burt, 2004;Granovetter, 1973;Marsden & Campbell, 1990;Perry-Smith, 2006;Zhu, Woo, Porter, & Brzezinski, 2013). ...
... Social networks facilitate job-to-worker matching in referral hiring and create inequalities among workers and social groups, which is highlighted by literature Rees (1966) and Granovetter (1973). 2 In the economy with referral hiring, workers with more friends have lower unemployment probabilities than those with fewer friends, and thus earn higher wages (Igarashi, 2016). Two main reasons lead to this result. ...
It is well known that differences in the average number of friends among social groups can cause inequality in the average wage and/or unemployment rate. However, the impact of social network structure on inequality is not evident. In this paper, we show that not only the average number of friends but also the heterogeneity of degree distribution can affect inter-group inequality. A worker group with a scale-free network tends to be disadvantaged in the labor market compared to a group with an Erd\H{o}s-R\'{e}nyi network structure. This feature becomes strengthened as the skewness of the degree distribution increases in scale-free networks. We show that the government's policy of discouraging referral hiring worsens social welfare and can exacerbate inequality.
... In a survey of residents of a Massachusetts town, Granovetter (1973Granovetter ( , 1995 found that over 50% of the available jobs are obtained through social contacts. Early work by Rees (1966), also in the context of the United States, found that the figure reached over 60%. ...
... Another important example of a direct social capital effect on the economic sphere is the role of networks in job searches and labor market matching. Seminal work by Rees (1966) highlighted that both employees and employers may benefit from relying on informal job search mechanisms, such as referrals by friends and existing employees, rather than formal mechanisms, such as advertisements. Related work by Granovetter (1973) proposed that 'weak ties' to acquaintances and more distant friends play a crucial role linking dense social networks, and provide individuals with access to information from beyond their immediate environment, including information about job opportunities. ...
... Finally, incarceration -especially imprisonment -can deplete the social capital that one can access after prison (Loeffler, 2013). The combination of time and distance away from home can make it difficult to stay connected to relatives and friends, especially "weak ties" that can be especially useful for finding jobs (Rees, 1966;Granovetter, 1973). ...
My dissertation covers topics in the economics of crime and the interesction between behavioral and development economics. The first chapter provides causal evidence that sentencing low-level offenders in the State of Michigan to prison rather than probation lowers their future criminal behavior but only through incapacitation, that is, during the time they spend in prison. We identify two sources of incapacitation: primary, from the original sentence, and secondary, from higher rates of future imprisonment among those who were initially sentenced to prison. The second chapter studies how economic decision making changes along the transition from college to the labor market. By collecting panel data from students in a university in Colombia, we are able to track changes occurring after students who are in their last semester of college receive and accept a job offer, and after they receive a paycheck relative to a comparison group of students who remain in college. We find evidence that students who transition to the labor market are less present-biased, more generous, and report having lower stress about finances and higher access to resources after the job offer. After starting to work and receiving a paycheck, they perform worse on cognitive tasks and report being more worried and frustrated than students in the comparison group. This suggests that there may be greater cognitive load associated with becoming more independent and earning money. We also highlight the role of incorporating phychological measures in experimentally-elicited preference tasks. Even though it seems that last-semester students become less risk averse when receiving and accepting a job offer, this result vanishes when controlling for psychological factors. In the third chapter, we study gender differences in beliefs regarding performance and in the updating process in the developing country context. Students in the sample are enrolled in a test-preparation course to take a high-stakes college entrance exam. They are randomized into receiving or not receiving feedback about their relative ability in the five areas covered by the exam. The findings suggest that there are substantial biases in assessing own ability. Across all areas of the test, between 50 and 70 percent of the students fail to correctly predict the quartile in which their score will be. Moreover, women are more biased and more likely to underestimate their performance in math and overestimate in text analysis relative to men. I show evidence that feedback may help close the gender in gap in confidence as women report being more positive about their chances of admission to this university while the men seem less sure of this outcome.
... This alternative job search is based on informal rather than formal channels (Rees, 1966;Holzer, 1988;Huffman and Torres, 2001). Often both types of channel are combined, although relational networks are considered more effective (Granovetter, 1973;Holzer, 1987). ...
Job search is a central element of activation policies, which aim to transform unemployed people into active jobseekers who are subject to checks. We examine a neglected aspect of activation: sanctions. To do so we analyse, through biographical interviews with formerly-unemployed people whose benefit payments have been stopped, what it means when a job search is deemed insufficient. Although these formerly-unemployed people have failed to present enough written and tangible evidence of their job search during checks, they have pursued a different type of job search comprising more informal activities that are difficult to convert into written documents. So, we identify a twin-stranded job search – prescribed and alternative. We also point out that the gap between institutionally-framed job search and experience-based job search widens among unemployed people having low employability attributes, so that ever-stricter checks penalize those who are most vulnerable.
... Job postings, private employment agencies, direct applications or other channels are used for this purpose. It is known that researches on the effectiveness of job research methods date back to very old times (for example, Granovetter, 1973Granovetter, , 1974Myers & Schultz, 1951;Rees, 1966;Rees & Shultz, 1970). Recent studies show that friends and social connections are much more effective among job research channels (Burks, Cowgill, Hoffman, & Housman, 2015;Gee, Jones, & Burke, 2017;Gür et al., 2012;Topa, 2011). ...
Countries invest in education systems in order to increase the quality of their human capital. In this context, it is seen that especially after the expansion of the higher education systems, countries try to increase higher education graduation rates in order to improve the quality of human resources in the labor market. The ultimate goal of these efforts is to facilitate the transitions from school-to-work, and to increase social welfare by meeting the human resources needs of the labor market. The facilitation of school-to-work transitions has a direct impact on youth unemployment. School-to-work transitions are influenced not only by the quality of education from primary to higher education but also by the dynamics of the labor market. Social network analysis can provide important insights into this dynamics, and in doing so reveal that there are indeed many factors that play a key role in determining who gets a job and why, including, first and foremost, social contacts. An analysis of job search channels reveals that partners, friends, and relatives are those social contacts that are most decisive for employment outcomes. Research reveals that employers use social-contact-based reference channels much more frequently than formal channels for recruitment. Thus, employers frequently use such reference channels in recruitment. It has also been shown that the use of social-contact channels reduces employers' costs of finding suitable employees and increases productivity since employees hired through these channels also stay longer in their firms. We here explore the full potential of social network analysis to better our understanding of school-to-work transitions, to reveal in no uncertain terms the importance of social contacts, and to show how these insights can be leveraged to level the labor market for all involved. An important take-home message is that the labor market dynamics is strongly affected by the Matthew effect, such that the inequalities and the gaps between opportunities only grow and widen as the underlying social networks evolve. It is therefore important to mitigate these effects well before school-to-work transitions come into play, namely during the education. In particular, we assert that minimizing the inequalities during education should effectively mitigate the uneven impact of social networks on school-to-work transitions.
... However, informal modes of research or social networks favor intensive prospecting and provide more precise information on working conditions and the tasks to be performed (Rees, 1966). These modes place more emphasis on prospecting through the social network. ...
... E.g., seeMyers and Shultz (1951);Rees (1966);Rees, Shultz et al. (1970);Granovetter (1973); Montgomery (1991); Granovetter (1995); Ioannides and Datcher-Loury (2004); Topa (2011); Rubineau and Fernandez (2013); Zeltzer (2020). 26 E.g., see Fernandez, Castilla, and Moore (2000); Brown, Setren, and Topa (2012); Fernandez and Galperin (2014); Burks, Cowgill, Hoffman, and Housman (2015); Dustmann, Glitz, Schönberg, and Brücker (2016); Pallais and Sands (2016); Bond and Fernandez (2019); Benson, Board, and Meyer-ter Vehn (2019). ...
... 19. The use of the immigrated population is motivated by the contributions of Rees (1966) and Granovetter (1973) concerning the similiarities existing between job seekers and referrals. 20. ...
The questions related to the integration of immigrants in host countries are positioned in an international context characterized by an increase in population flows in recent decades. The mechanisms determining the integration of immigrants into the labor market depend on individual, social and economic characteristics. Based on this observation, we analyze in this thesis the role of social relations as a determinant influencing both the integration of immigrants on the labor market and the occupational mismatch of immigrants. Concerning the role of social networks as a means of job search, we analyze, using French data, the relationship between network effect and economic cycle. Our results show that the network effect is countercyclical. The use of referrals to find a job is stronger during recessions than during expansion periods. We extend our analysis by studying the relationship between occupational mismatch and the network effect. Beyond individual characteristics that may contribute to explain the probability of being over/undereducated, we hypothesize that finding a job through a referral influences the educational match between immigrants and the jobs held. We observe an ambiguous effect between the role of referrals and occupational mismatch according to the origin of immigrants.
... There are two different types of informal methods: the use of social network contacts, which often entails contacting friends, colleagues, and relatives, and direct application, in which the jobseeker approaches firms directly. Formal search methods entail either a public display of information or a formal intermediary and can include methods such as responding to ads and using employment agencies (Rees, 1966;Van Hoye et al., 2013). 3 Searching for jobs through social networks should be facilitated by having a good network to ask, suggesting that an actor probably devotes more energy to asking contacts for assistance as his or her social capital increases. ...
Social networks play an important role in the employer–worker match, and the social capital perspective has been used to understand how social networks contribute to labour market inequality. This paper investigates the effect of social capital on achieving a stable labour market position for young adults, examining how boosted labour market self-efficacy is a possible mediator. The paper also examines whether social capital and self-efficacy are related to the preferred job search method. The study utilises a Swedish survey of young adults that is linked to tax register data on earnings. Here, social capital is defined as an extensive network and measured with the position generator, asking about knowing contacts in various occupations. The paper analyses heterogeneous effects that depend on the respondents’ initial status regarding employment and job search. The results show that social capital and job-finding self-efficacy are positively related to achieving stable employment for the initially not employed job searchers, but there is no effect for those initially employed and not searching for a new job. Furthermore, an analysis of job search methods reveals that social capital is positively related to preferring social networks and direct application and negatively related to searching through public employment services. The results also indicate that self-efficacy mediates only a little of the relationship between social capital and prospective employment, suggesting that job-finding self-efficacy likely only contributes slightly to how social capital affects labour market outcomes.
... 22 In that (non-generic) case, the mixing becomes irrelevant since there is 0 net expected value in the relationship to either side. 23 Thus, equilibrium behavior in the pool stage is such that firms hire workers from the pool at a wage of w min if the expected value of workers in the pool exceeds w min , do not hire from the pool if the expected value is below w min , and both sides can mix arbitrarily if the expected value of workers in the pool is exactly w min (which 19 For instance, see Rees (1966) ;Fernandez, Castilla and Moore (2000); Brown, Setren and Topa (2016); Pallais and Sands (2016) 20 For instance, see the references in Ioannides and Datcher-Loury (2004); Eriksson and Rooth (2014). 21 See Beaman and Magruder (2012); Beaman et al. (2018) for discussion of how workers choose whom to refer. ...
We study the consequences of job markets' heavy reliance on referrals. Referrals screen candidates and lead to better matches and increased productivity, but disadvantage job-seekers who have few or no connections to employed workers, leading to increased inequality. Coupled with homophily, referrals also lead to immobility: a demographic group's low current employment rate leads that group to have relatively low future employment as well. We identify conditions under which distributing referrals more evenly across a population not only reduces inequality, but also improves future productivity and economic mobility. We use the model to examine optimal policies, showing that one-time affirmative action policies involve short-run production losses, but lead to long-term improvements in equality, mobility, and productivity due to induced changes in future referrals. We also examine how the possibility of firing workers changes the effects of referrals.
... Despite mounting empirical evidence, attempts to incorporate the concept of migrant network in theoretical analysis of labor migration remain scanty. In this paper, we shall explore the cost-saving aspect of migrant networks and accordingly characterize the resulting pattern of migration in a dynamic setting (Rees 1966;Montgomery 1991). ...
International migration has assumed significance in the policy discourse as a livelihood strategy adopted by households and individuals in Bangladesh. Migration whether within a country or across borders entails both costs and benefits. For migrants to make any significant strides in securing improvement in wellbeing, benefits accruing from migration should exceed the costs involved. This paper sought to provide assessment of the costs and benefits pertaining to international migration from Bangladesh to Italy. In this paper, we examine the role of migrant network in determining patterns of outmigration. Conditions under which migration equilibrium may permit multiple steady states are identified. The study employed data collected through questionnaire-survey and the data was analysed using cost-benefit formula. Our analysis discusses instances where migration generates its own demand and explains differences in migration propensities across potential sources of outmigration. The findings indicate that in real terms benefits outweigh the costs of migration. This means that there is economic justification for people to undertake out-migration. The paper, concludes that international migration is beneficial to those who embark on it as a livelihood strategy. Therefore, to reduce the positive and negative impacts of international migration and development to their equivalent money value Cost-Benefit Analysis determines whether on balance the migration is worthwhile. The equivalent money value is based upon information derived from migrants and labour market choices, the demand and supply schedules for labour affected by the movement.
... Yet, firms face a trade-off in their choice of hiring channels (Montgomery, 1991). Under the "good match" hypothesis (Rees, 1966), current employers can help overcome the asymmetric information problem and create better employment matches as they know both the firm and the people in their network. By contrast, the "limited choices" hypothesis stresses that finding employment through social networks limits the opportunities and match quality (Loury, 2006). ...
... There are two different types of informal methods: the use of social network contacts, which often entails contacting friends, colleagues, and relatives, and direct application, in which the jobseeker approaches firms directly. Formal search methods entail either a public display of information or a formal intermediary and can include methods such as responding to ads and using employment agencies (Rees, 1966;Van Hoye et al., 2013). 3 Searching for jobs through social networks should be facilitated by having a good network to ask, suggesting that an actor probably devotes more energy to asking contacts for assistance as his or her social capital increases. ...
Young adults in Europe sometimes have trouble moving away from their parents and obtaining a home of their own, which is considered an important step in the transition to adulthood. This paper investigates whether nest-leaving is affected by individual social capital and parental economic capital. The paper also examines how these resources are related to the type of housing tenure obtained and whether the housing was acquired through informal channels. In addition, the paper assesses whether differences in access and returns to social capital can explain the later nest-leaving of the children of immigrants. The study uses a Swedish two-wave panel survey of young adults aged between 19 and 22. Individual social capital is operationalized as an extensive social network measured with the position generator, while parental economic capital is estimated with registered disposable income. The results show that individual social capital is positively related to prospective nest-leaving, but parental income is not. Nevertheless, both individual social capital and parental economic capital are related to the obtained housing tenure type: social capital is linked to informal ‘second-hand’ rental agreements often acquired through contacts, whereas having high-income parents is linked to obtaining owned housing tenure. The children of immigrants are found to be more likely to live with their parents, but this is not explained by lower access or return to social capital.
... Since the 1960s, studies on paths to employment have stressed the role of personal networks or social ties in finding jobs (Rees 1966), and over the years this has been confirmed by other researchers (Wegener 1991;Holzer 1987;Wahba and Zenou 2005). With the advent of social networks, researchers have also studied the use of these tools for job hunting (Marin 2007;Cappellari and Tatsiramos 2015;Trimble and Kmec 2011;Trimble 2015). ...
This chapter addresses the micro-level of graduate employability, the level of the students and graduates. The concept of self-perceived employability is defined. Perception depends on aspects that include more than formal education: in particular, sociological research has advanced understanding of how the labour market, as a construct of individuals, is perceived subjectively by those preparing for or seeking work. Also, the perception of one’s employability is conditioned by one’s awareness of the global and the local labour markets, and of the channels to access work, which vary according to the work sector or type of company.
... Since the 1960s, studies on paths to employment have stressed the role of personal networks or social ties in finding jobs (Rees 1966), and over the years this has been confirmed by other researchers (Wegener 1991;Holzer 1987;Wahba and Zenou 2005). With the advent of social networks, researchers have also studied the use of these tools for job hunting (Marin 2007;Cappellari and Tatsiramos 2015;Trimble and Kmec 2011;Trimble 2015). ...
This chapter discusses trends in pedagogies for employability. It reports on findings of research about the most effective methods for enhancing employability and then explores the relation between the place and pedagogical approaches, considering the value of place awareness for employability potential. Finally, it describes the main features of rural economies and seeks to identify elements there that can support the employability of graduates.
... Since the 1960s, studies on paths to employment have stressed the role of personal networks or social ties in finding jobs (Rees 1966), and over the years this has been confirmed by other researchers (Wegener 1991;Holzer 1987;Wahba and Zenou 2005). With the advent of social networks, researchers have also studied the use of these tools for job hunting (Marin 2007;Cappellari and Tatsiramos 2015;Trimble and Kmec 2011;Trimble 2015). ...
In response to many demands about their role within society, in the past few decades universities have reviewed and changed curricula and teaching methods, and created, improved, or diversified initiatives to link with reference territories. In this ongoing effort, universities need to address the issue of their own “new role” and identity within a continuously changing society. This chapter outlines the key themes of the “changing university” by focusing on the employability issue, looking at emerging employability models, and reporting on the current debate about the role of the university within the social system.
... Since the 1960s, studies on paths to employment have stressed the role of personal networks or social ties in finding jobs (Rees 1966), and over the years this has been confirmed by other researchers (Wegener 1991;Holzer 1987;Wahba and Zenou 2005). With the advent of social networks, researchers have also studied the use of these tools for job hunting (Marin 2007;Cappellari and Tatsiramos 2015;Trimble and Kmec 2011;Trimble 2015). ...
This chapter provides an overview of the key policies and strategies that are directly linked to regional development and universities. After a summary on how regional policies have changed over time, it outlines educational policies affecting higher education, then offers an overview of global goals, which are, or should be, the overarching framework for policy interventions at all levels. The chapter concludes with some considerations about the implications of graduate employability’s theme in regional economies and local markets.
... Since the 1960s, studies on paths to employment have stressed the role of personal networks or social ties in finding jobs (Rees 1966), and over the years this has been confirmed by other researchers (Wegener 1991;Holzer 1987;Wahba and Zenou 2005). With the advent of social networks, researchers have also studied the use of these tools for job hunting (Marin 2007;Cappellari and Tatsiramos 2015;Trimble and Kmec 2011;Trimble 2015). ...
The concept of employability ranges from the individual to the global dimensions, and encompasses several domains. This chapter outlines the key socio-economic transformations that have modified transition pathways between education and work, and describes the changing nature of jobs and careers. Following major changes in the nature of employment, the concept of employability has been accordingly re-formulated: in this context, the nature of jobs for university graduates has changed towards new professional roles and positions that are not yet fixed. The chapter introduces the main shift from employment to employability as a consequence of new policies implemented, in particular in Western countries, then analyses the concept of employability that has resulted from socio-economic changes, including the entrepreneurial components, and concludes with the analysis of “university graduate jobs” as conceived today.
Ülkeler kalkınma süreçlerini sürekli kılmak ve rekabet güçlerini artırmak için beşerî sermayelerinin niteliğini artırmaya özel önem vermektedir. Bu amaca yönelik en etkin enstrüman eğitimdir. Bu nedenle ülkeler eğitim sistemlerinde evrenselleşmeyi sağlamak için, yani tüm vatandaşlarının eğitime katılımını sağlamak için devasa bütçeler kullanmaktadır. Bu süreç eğitimde kitleselleşmeye yol açmış ve okuldan-işe sorunsuz geçiş sağlayabilmek için eğitim sistemi ve işgücü piyasasında yapılması gerekenler sıcak tartışma gündemine taşınmıştır. Bu kapsamdaki tartışmalarda okuldan-işe geçişteki sorunların çoğunlukla eğitim sistemindeki eksikliklerle ilişkilendirildiği görülmektedir. Ancak bu eğilim okuldan-işe geçişte toplumlarda görünmez sosyal ağların ve işe alımdaki gerçek dinamiklerin çoğunu göz ardı etmektedir. Bu nedenle bu çalışmada istihdam dinamiklerinin anlaşılmasında öncü rol oynayan ve halen geçerliliğini koruyan Granovetter ağ modeline dayalı olarak istihdam edilebilirlik ele alınmaktadır. Granovetter modeli ve zayıf bağların önemi, Granovetter modelinin yeni ağ modelleri ile ilişkisi ve Granovetter modelinde Matta etkisi irdelenmektedir. Ayrıca, okuldan işe geçişte bu model bilgisine göre hareket etmenin beşerî sermaye kadar önemli olduğu vurgulanmaktadır.
Religious communities are important providers of social insurance. We show that risk associated with oil dependence facilitated the proliferation of religious communities throughout the U.S. South during the twentieth century. Known oil abundance predicts higher rates of church membership, which are not driven by selective migration or local economic development. Consistent with a social insurance channel, greater oil price volatility increases effects, while greater access to credit, state-level social insurance, and private insurance crowd out effects. Religious communities limit spillovers of oil price shocks across sectors, reducing increases in unemployment following a negative shock by about 30 percent.
I build on Bandiera et al. (Quarter. J. Econ. 120(3):917–962, 2005) and propose a novel mechanism whereby the structure of social network within an organization matters for its efficiency. The ability of each agent is private information, but adjacent agents in the network can observe each other’s ability. Under relative performance evaluation, the effect of adding links among agents on the effort level is ambiguous, and is determined by the second- (complementarity) and third-order (“risk” attitude) cross-partial derivatives of the compensation function. If the second- and third-order cross-partial derivatives of the compensation function satisfy certain conditions, any network structure can maximize the output given that compensation scheme.
Why is the world not moving fast enough to solve the climate crisis? Politics stand in the way, but experts hope that green investments, compensation, and retraining could unlock the impasse. However, these measures often lack credibility. Not only do communities fear these policies could be reversed, but they have seen promises broken before. Uncertain Futures proposes solutions to make more credible promises that build support for the energy transition. It examines the perspectives of workers, communities, and companies, arguing that the climate impasse is best understood by viewing the problem from the ground up. Featuring voices on the front lines such as a commissioner in Carbon County deciding whether to welcome wind, executives at energy companies searching for solutions, mayors and unions in Minnesota battling for local jobs, and fairgoers in coal country navigating their uncertain future, this book contends that making economic transitions work means making promises credible.
This study analyzes the interplay between the segregation level, education cost, and the evolution of group inequality. In a market economy, individuals have incentives to invest in skill acquisition because of wage differentials. Because skill achievement is costly, a person with a higher inherent ability or a better community background is more likely to invest. Bowles, Loury, and Sethi (2014) show the possibility of group inequality evolution with a high level of segregation when network externalities over the skill acquisition period affect an individual’s decision of skill achievement. This study emphasizes the effect of education costs on the evolution of group inequality. Even when the level of segregation is high, if the societal education cost of skill acquisition is not sufficiently large, group skill disparity may not evolve. Observing that education costs vary significantly across countries depending on the structure of their educational institutions, this theoretical analysis suggests that some countries may suffer more from between-group disparity than others because their education systems impose higher costs on individuals.
Human capital is a major impetus for technological innovation. We examine the relation between the technological dimension of product market competition and the disclosure of skill requirements in job postings. On the one hand, technological competition may raise the urgency of recruiting tech talent and make firms provide more specific skill requirements. On the other hand, technological competition can increase the proprietary costs of skill requirement disclosure. Using technological peer pressure as a measure of technological competition, we find that firms facing intense technological competition provide more specific skill requirements for tech positions, suggesting that the disclosure benefits outweigh the proprietary costs when firms face pressure to innovate. The effect of technological peer pressure is more pronounced among firms that make only incremental innovations and less pronounced among firms that rely on trade secrets or have greater industry peer presence in close geographical proximity. Our study documents a distinct relationship between technological competition and voluntary disclosure targeted to labor market participants.
Albert Rees played a critical role in both the profession of economics and US government economic policy. One of the first scholars to gather large-scale labour market data sets, he also designed and ran a pathbreaking early randomised control trial (RCT) of a public policy, introducing the technique of RCTs into the social sciences. Rees served in leadership roles at the University of Chicago and Princeton University as well as in philanthropy and, several times, in various administrative and advisory roles in the US government.
A career search is a long process which requires effort. It can take months before you can find a job that suits your unique needs almost everyone is well aware of the fact that finding a job in Afghanistan is difficult and requires an iron shoe. For recruitment any candidate is required to go for interviews with different companies, it doesn't matter if you've just graduated from a reputable university or have decided to enter the job market after finishing high school, finding a job with the right income and conditions is a challenge. Finding a job is difficult for many job seekers because they choose the toughest way to find a job. There are generally different ways to look for a job that anyone can choose from depending on their abilities. Traditionally, job-search approaches have been broken down into' formal' and' informal' approaches. Formal approaches such as jobs agency services or reacting to advertising published in magazines, journals, newspaper and, more recently, the Internet. The use of personal contacts is one of the informal job-search techniques most studied.in this survey In order to meet the objective; both quantitative as well as qualitative research technique has been used. On the other hand both secondary as well as primary data used for this research paper. For primary data collection, a semi- structured questionnaire designed to collect the information. Books, articles, journals and database are used as secondary sources. Therefor the outcome of this research will help to understand more about employee job search opinion of on various job search methods in Afghanistan.
El uso de internet permite realizar ahora diferentes actividades que antes se realizaban personalmente, incrementando así la productividad y el crecimiento económico de los países. Sin embargo, es indispensable poseer conocimientos necesarios para asociar su uso con actividades productivas en la sociedad. El presente documento investiga cuál es la efectividad del uso de la internet en la búsqueda de empleo en el mercado laboral ecuatoriano. El diseño metodológico incorpora un modelo de elección discreta que involucra como variable de tratamiento el método de búsqueda de empleo y como variables de control las características socioeconómicas de los individuos, esto sobre la probabilidad de encontrar trabajo. La investigación emplea los microdatos de la Encuesta Nacional de Empleo, Desempleo y Subempleo (ENEMDU) recopilados por el Instituto Nacional de Estadística y Censos de Ecuador (INEC) en los años 2018 y 2019. Los principales resultados sugieren que la búsqueda de oportunidades laborales a través del internet incrementa la probabilidad de encontrar empleo en un 3%. Igualmente se encuentra que el género, los niveles educativos, edad, estrato y localización geográfica del trabajador impactan de manera significativa la probabilidad de encontrar empleo.
I examine the effects of geographic distribution of firms on the expected stock returns. Information spillovers and coordinated actions by interacting managers increase the cyclicality of wages in agglomerated industries compared to dispersed industries. Consequently, geographic agglomeration provides firms a “natural hedge” against aggregate shocks. In contrast, geographically dispersed firms have higher exposure to aggregate shocks. A portfolio that goes long on geographically dispersed industries minus agglomerated industries – the GDMA portfolio – captures aggregate shocks. Stocks that co-vary closely with the GDMA portfolio returns earn higher expected returns. In the time-series, the premium is more pronounced during recessions when investors shrink from risk. In the cross-section, the premium is more pronounced among low profitable firms that are more vulnerable to adverse shocks.
After ten years, we have before us a new study on the position of young people
in Slovenia, Mladina 2020 (Youth 2020). The national study, which concerns
itself with the young generation, specifically 15- to 29-year olds, is of paramount
importance for the client (Office of the Republic of Slovenia for Youth),
as well as for young people and society as a whole. With the aid of the Mladina
2020 (Youth 2020) study and the recommendations that researchers offered
as part of the final report, the Office’s goal is primarily to formulate evidence-
based public policies that have an impact on young people’s lives.
After ten years, we have before us a new study on the position of young people in Slovenia, Mladina 2020 (Youth 2020). The national study, which concerns itself with the young generation, specifically 15- to 29-year olds, is of paramount importance for the client (Office of the Republic of Slovenia for Youth), as well as for young people and society as a whole. With the aid of the Mladina 2020 (Youth 2020) study and the recommendations that researchers offered as part of the final report, the Office’s goal is primarily to formulate evidence-based public policies that have an impact on young people’s lives. These should create better conditions for young people’s transition to adulthood and give mature generations peace of mind, knowing that the young generation is empowered and well prepared to face all life circumstances. However, is this true? So what are young people like at this moment in time?
The widespread use of employee referrals raises questions regarding how they affect labor market outcomes. Does referral hiring lead to a more efficient allocation of workers compared to when hiring is possible only on a competitive market? To utilize the social links of their employees, are employers willing to pay a wage premium? We develop a model and provide results from a laboratory experiment to address these questions. We find that employers often hire via referrals, which in turn mitigates adverse selection and elevates wages. Importantly, employers anticipate the future value of hiring high-productivity employees—which consists of gaining access to valuable social links—and are thus willing to take the risk of offering wage premiums when hiring on the competitive market. We also find that employers' risk aversion and the dynamic nature of the hiring process can help account for the inefficiency remaining in the labor market.
Using a representative sample of Chinese urban employees, we empirically study the impact of the utilization of informal job search through social networks on wage. We find a premium of initial wage associated with job referral, but the wage premium diminishes over tenure. We also find that the effect of job referral on initial wage reduces when human capital plays a more important role, or the recruitment process and the economic system are more market-oriented. Our findings are consistent with the learning theory that job referral can reduce information asymmetry between employees and employers at the beginning they meet, but the informational advantage diminishes over time as the employers know non-referred workers gradually.
Like all markets, the market for labour is imperfect and characterised by information asymmetry. On the one hand, those looking for a job are unlikely to know about all potential employment opportunities, or all the details of the post and the employer expectations that come with the role. On the other hand, employers cannot know everything about all possible candidates, their history, and their suitability for the work. This is particularly true of skilled roles, and job searches can be both lengthy and expensive. Modern labour markets have developed numerous ways of dealing with the issue of asymmetric information. Labour market intermediaries, for example, play an important role in linking employers with employees, through recruitment or employment agencies, the advertising of job opportunities on internet search boards, targeted e-mailing lists, newspapers, job centres, and even street corner day labour queues. There are also a number of ‘signalling devices’ which are used to demonstrate a candidate’s suitability for a particular role, such as educational or professional qualifications, and the use of references and personal recommendations. None of these methods are perfect, but they do go some way towards alleviating the risk, uncertainty, and high transaction costs inherent in the finding and hiring of labour. This paper explores whether any comparable means were used to overcome similar problems in the Roman labour market. It considers the evidence for labour market intermediaries, such as labour contractors, employment agencies, and informal labour exchanges; the potential role of ‘professionalisation’ and qualifications, in particular apprenticeships; the utilisation of networks and personal recommendations, including the possible use of letters of recommendation, and both formal and informal associations, ranging from collegia and groups of migrant traders to local networks within urban neighbourhoods and rural communities; and finally, the extra-economic coercion of workers and the employment of dependent labour, including the enslaved, formerly enslaved, and clients.
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