The Temptation of Social Networks under Labor Search Frictions
2018/03/02
研討會日期 : 2018-03-02
時間 : 11:00
主講人 : Mr. Norihiko Matsuda
主持人 : Professor Chu-An Liu
地點 : Conference Room B110
演講者簡介 : Mr. Matsuda will receive his Ph.D. in Agricultural and Applied Economics from University of Wisconsin-Madison in 2018. His research fields are Development Economics and Labor Economics. He is applying for a position of the Institute of Economics, Academia Sinica now.
演講摘要 : Why are a large fraction of jobs, particularly low-status jobs, matched through social networks? We propose an equilibrium search model that sheds light on a neglected aspect of social networks—they help to match, but not necessarily with good-match partners. In the presence of search frictions, workers and firms can be tempted by bad-match encounters through social networks. This temptation is stronger for less productive, poorer workers and firms because costly formal channels are less rewarding for them. Using linked employer-employee data in Bangladesh that include direct measures of job match quality, we find that matching through social networks rather than formal channels requires less time and effort, but results in poorer matches. Our analysis rejects alternative theories such as models of screening, peer effects, and favoritism. This paper demonstrates that while social networks compensate for search frictions in formal labor markets by matching more workers and jobs, their match quality is low. This downside of social networks highlights the role of formal labor markets in producing better matches, and underscores the importance of policies that address search frictions.
