How helpful are social networks in finding a job along the economic cycle? Evidence from immigrants in France

Eva Moreno Galbis; Francois-Charles Wolff; Arnaud Herault

doi:10.1016/j.econmod.2020.05.017

Journal articles

How helpful are social networks in finding a job along the economic cycle? Evidence from immigrants in France

Eva Moreno Galbis ¹ Francois-Charles Wolff ² Arnaud Herault ³

1 AMSE - Aix-Marseille Sciences Economiques

2 LEMNA - Laboratoire d'économie et de management de Nantes Atlantique

3 GRANEM - Groupe de Recherche Angevin en Economie et Management

Abstract : Around 50% of individuals obtain or hear about jobs through social networks. This hiring trend may become problematic when the labor market is tight and people need less social contacts to find a job. Using a one-period static model where network members may receive job offers directly from the firm or indirectly through employed members in the network we show that the share of new hires finding a job through social connections (ie network matching rate) decreases with the job finding rate. Using French data for the period 2003-2012, we test this prediction with immigrants, a population subgroup for whom networks play a major role in occupational decisions. We propose two network matching rate indicators, one based on direct recommendations and another one internalizing the positive externality on the employment probability induced by peers. We find a decreasing relationship between the network matching rate and the job finding rate. Social connections are less helpful for finding jobs during economic expansions.

Keywords : Immigrant Network matching rate Economic cycle

Document type :

Journal articles

Domain :

Humanities and Social Sciences / Economics and Finance

Complete list of metadatas

https://hal-amu.archives-ouvertes.fr/hal-02944389
Contributor : Elisabeth Lhuillier <>
Submitted on : Monday, September 21, 2020 - 2:20:38 PM
Last modification on : Wednesday, October 14, 2020 - 3:49:43 AM

How helpful are social networks in finding a job along the economic cycle? Evidence from immigrants in France

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How helpful are social networks in finding a job along the economic cycle? Evidence from immigrants in France

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