Job Search Strategies and Wage Effects for Immigrants

Abstract: Recruiting Through Networks - Wage Premiums and Rewards to RecommendersThis paper examines the firm's use of recommenders in its recruiting process. In the model, recommenders possess personal information about the worker's ability and about the workplace. In view of this private information, the firm may reward recommenders for good recruiting, thus using recommenders as a screening device. In equilibrium the expected skill of a worker is higher if recruitment has occurred through a recommender rather than through the market, but there is no wage premium. Swedish survey data supports the absence of a wage premium for recommended workers. It has not been possible to test the expected skill or the firm's reward policy vis-à-vis the recommender.Job Search by Immigrants in SwedenThis paper analyses the job search strategies of immigrants born outside Europe and compares these with the search strategies of the native population. The analysis uses unique Swedish data gathered during 1998. Two clear patterns can be traced in the empirical analysis: immigrants search more intensively than natives; also, the greater search intensity is a requisite for getting a job. Specifically, the first analysis shows that immigrants who got jobs were likely to have used networks or direct contact with employers to a greater extent than natives. Immigrants who got jobs had submitted more applications and spent more time on job search than natives, while those who did not get jobs had not spent more time on job search than natives. The fourth and last analysis looks at the number of methods used in job search. Immigrants who left unemployment had not used more methods than natives. On the other hand, immigrants who remained unemployed had used significantly more methods than natives, indicating that it is not necessarily productive to use too many methods.Wage Effects of Search Methods for Immigrants and Natives in SwedenUsing unique cross-section survey data collected in 1998, this study examines whether successful job-search method differ between natives and immigrants from outside Europe, and whether there is a wage difference between the two groups associated with the search method used.It is found that those individuals from outside Europe who got jobs did relatively better when using formal methods than when using informal ones.Next, a wage analysis has been performed, which shows that there is an overall wage discount for those born outside Europe. The discount is larger when using informal methods rather than formal.To explore this further the informal method measure is divided in two parts, one part for contacts through friends and family and the second for contacts with the employer. The penalty for immigrants from outside Europe using an informal method as a successive job-search device is partly explained by contact with the employer, suggesting that the penalty for using informal methods has been underestimated in previous studies.An attempt has also been made to control for the effect of unobservable characteristics on wages, but this did not have any significant impact.