Since applying for jobs is costly, workers prefer applying where their employment probability is high and, therefore, to jobs attracting fewer higher quality applicants. Since creating vacancies is expensive, firms create more vacancies when job-seeking is high. Our model captures these ideas...

We show that increasing the probability of obtaining a job offer through a network should raise the observed wages of workers in jobs found through formal channels relative to those in jobs found through the network. This prediction holds at all percentiles except the highest and lowest. The...

This paper briefly reviews the empirical evidence on labor market segmentation and presents some new results on the similarity of the pattern of segmentation across 66 different countries. The paper goes on to consider how unemployment might be understood in a labor market segmentation...

In this paper we highlight a specific mechanism through which social networks help in job search. We characterize the strength of a network by its likelihood of providing a job offer. Using a theoretical model we show that the wage differential in jobs found using networks versus those found...

In this paper we highlight a specific mechanism through which social networks help in job search. We characterize the strength of a network by its likelihood of providing a job offer. Using a theoretical model we show that the wage differential in jobs found using networks versus those found...