Job Tenure and Personal Contacts: Good Matches or Limited Choices?
No 417, Discussion Papers Series, Department of Economics, Tufts University from Department of Economics, Tufts University
This paper contends that there is an alternative explanation of the positive relationship between using informal contacts and job tenure for some young men. Lower wages, wage growth, and expected job tenure may characterize those using contacts with little clout in the market. In such cases, the correlation between informal contacts and job tenure should not be interpreted as evidence of better match quality. Workers with poor quality personal contacts may rely on informal information sources only as a last resort when they are unable to find lucrative jobs through other means. Such workers would remain at their current jobs mainly because they have limited alternative choices rather than because of better match quality.
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