Social Contacts, Wages, and Turnover: The Case of the Egyptian Labour Market

Omar Mohsen Hussein ()
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Omar Mohsen Hussein: University of Essex and Institute for Social and Economic Research

No 1536, Working Papers from Economic Research Forum

Abstract: The objective of this paper is to investigate empirically the role of social networks in the determination of labour match quality in the Egyptian labour market. We study the differentials in wages and turnover between workers who found their jobs through social contacts compared to those who found them through other search methods. Using individual level data from the 2018 round of Egypt Labour Market Panel Survey (ELMPS), we build a worker fixed effect model for wages, and an employment survival model for turnover, and introduce interactions with tenure, skill level, and occupation to assess the possible heterogeneities of network effects. Our findings indicate an overall insignificant effect on initial wages, but there exists a wage penalty that appears on long run for connected workers. The effect on wage is insignificant for low skilled workers and negative for skilled workers. Contacts have a positive and significant effect on job duration for low skilled workers and the effect is insignificant for skilled workers

Pages: 36
Date: 2022-02-20, Revised 2022-02-20
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Published by The Economic Research Forum (ERF)

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