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The Effect of Social Networks on Entry Wages
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2013 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This paper analyzes the effect of finding a job through social networks on entry wages and how this effect differs for different types of contacts. Further, this study examines firms’ abilities in screening workers’ productivity using social networks and if firms value unobservable abilities of referred workers more than the same abilities for workers without a connection. The data used is the National Longitudinal Survey of Youth 1997 (NLSY97) for the United States of America. The results indicate that very young workers receive higher entry wages when they are hired via social networks and the most beneficial contacts to be referred by are parents or relatives. Firms are better at screening older employees than very young ones through social networks. I find no support that firms give higher returns to the referred workers’ unobservable abilities.

Place, publisher, year, edition, pages
Keyword [en]
Social Networks, Entry wages, Employee referrals
National Category
URN: urn:nbn:se:uu:diva-198260OAI: oai:DiVA.org:uu-198260DiVA: diva2:615569
Social and Behavioural Science, Law
Available from: 2013-04-11 Created: 2013-04-11 Last updated: 2013-04-15Bibliographically approved

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