Fast, Easy and Cheap Job Matching : Social Networks in Bangladesh

Matsuda, Norihiko ; Nomura, Shinsaku

World Bank, Washington, DC

关键词: SOCIAL NETWORKS;    LABOR MARKET;    JOB SEARCH;    REFERRALS;   

DOI  :  10.1596/1813-9450-8107
RP-ID  :  WPS8107

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper uncovers the reason whysocial networks are used in a job market. The data arenovel: a nationally representative matched employer-employeedata set in Bangladesh with detailed information, includingdirect measures of the use of social networks. The empiricalanalysis shows that compared with those who used openchannels to find jobs, the employees who used socialnetworks found jobs more easily, have lower observableabilities, and achieved lower employment outcomesconditional on observable and unobservable abilities. Theseresults are robust whether firm-occupation fixed effects arecontrolled for or not. By comparing these findings withtheoretical predictions, the paper concludes that socialnetworks play the role as fast and easy but narrow-spectrummatching. That is, social networks allow job seekers to findjobs quickly and easily and thereby reduce search costs, butthe types of jobs available from social networks arenarrower than those from open channels. As a consequence,those who choose to use social networks are more likely toend up having mismatched jobs, that is jobs in which theycannot take advantage of their specialties. In the contextof developing countries, a considerable number of poor jobseekers may use social networks out of necessity even if thereturns to finding good-match jobs through open channels aresufficiently high.