Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92292
Authors: 
Beradi, Nicoletta
Year of Publication: 
2013
Citation: 
[Journal:] IZA Journal of Labor & Development [ISSN:] 2193-9020 [Publisher:] Springer [Place:] Heidelberg [Volume:] 2 [Year:] 2013 [Pages:] 1-26
Abstract: 
We develop a theoretical framework that considers the role played by moral hazard and the diversity of networks and cultures in the choice of hiring channel. In favoritism contexts social networks, and particularly strong ties, are adopted as hiring channels for unskilled jobs and result in wage penalties, while otherwise the opposite happens. We estimate an endogenous switching model for the case of Senegal's manufacturing formal sector and find, consistently with our theoretical predictions in case of favoritism, that informal hiring channels are preferred to fill unskilled vacancies and are associated with a wage penalty, especially when ties are stronger.
Subjects: 
social networks
hiring channel
wage differential
JEL: 
O12
J31
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/2.0/
Document Type: 
Article
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