Do Job Seekers Benefit from Contacts? A Direct Test with Contemporaneous Searches

Elena Obukhova () and George Lan ()
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Elena Obukhova: MIT Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142
George Lan: MIT Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142,

Management Science, 2013, vol. 59, issue 10, 2204-2216

Abstract: Although it is intuitively plausible that a job seeker benefits by using contacts in her job search, the literature is plagued by theoretical disagreements and inconclusive empirical evidence. Single-firm studies consistently find that job seekers applying through referrals achieve better labor-market outcomes than job seekers applying without referrals, but the evidence from job-seeker studies is mixed. To solve this puzzle, we clarify the distinction between having social capital and using contacts as a search method. We present theoretical reasons to suggest that the lack of an association between a job seeker's social capital and whether or not she uses social networks to search for a job should not be taken to imply that job seekers who use social networks to search for jobs do not benefit from using contacts. We exploit a strategic research setting, the school-to-work transition of 291 university graduates who engaged in 3,112 contemporaneous job searches, to show that although a job seeker's social capital may not affect whether or not she uses contacts to search for a job, using contacts as a job-search method does improve her job-search outcomes. We conclude by discussing the implications of our findings for the literature on job search and social networks. This paper was accepted by Jesper Sørensen, organizations.

Keywords: labor markets; social capital; job search; network causality; school-to-work transition (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (14)

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