Network Search: Climbing the Job Ladder Faster

28 Pages Posted: 22 May 2019

See all articles by Marcelo Arbex

Marcelo Arbex

University of Windsor

David G. Wiczer

SUNY Stony Brook - Department of Economics

Date Written: May 2019

Abstract

We introduce an irregular network structure into a model of frictional, on‐the‐job search in which workers find jobs through their network connections or directly from firms. We show network‐found jobs have higher wages, and thus better‐connected workers climb the job ladder faster. The mean field approach allows us to formulate heterogeneous workers' recursive problem tractably. Our calibration is consistent with several empirical findings because of a composition—not information—effect. We also introduce new model‐consistent evidence: Job‐to‐job switches at higher ladder rungs are more likely to use networks.

Suggested Citation

Arbex, Marcelo and Wiczer, David G., Network Search: Climbing the Job Ladder Faster (May 2019). International Economic Review, Vol. 60, Issue 2, pp. 693-720, 2019. Available at SSRN: https://ssrn.com/abstract=3391448 or http://dx.doi.org/10.1111/iere.12375

Marcelo Arbex (Contact Author)

University of Windsor

401 Sunset Avenue
Windsor, N9B 3P4
Canada

David G. Wiczer

SUNY Stony Brook - Department of Economics ( email )

NY 11733-4384
United States

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