The empirical findings confirm gender differences in job finding as hypothesised. Females are less likely to find a job via social ties which can be interpreted as evidence for the homophily hypothesis. Females seem to be less involved in valuable networks helpful in finding a job. The relationship between age and the two formal channels newspaper and internet adverts can be described as inverted u-shaped. Especially young and older job seekers are more likely to find a job via social ties. Younger job seekers dispose of less work experience and branch or job specific human capital. Additionally, employers might have difficulties estimating the work motivation and other characteristics which are unobservable at the beginning of a career. Thus, younger job seekers benefit from their social ties because asymmetric information is particularly high in this case. Plug et al. (2015) explained this finding by the use of parental
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networks. In order to help their children finding a good job at the beginning of the career, parents make use of their social ties in order to overcome the lack of social capital of their children. Older job seekers, in turn, dispose of a large network of ties established during their working life. Through their ties they are able to find a job although empirical evidence shows that employers refrain from hiring older workers because they fear higher labour costs, lower productivity, or more or longer periods of sickness absence (Boockmann, Zwick, 2004). The level of education is positively related to finding a job via formal ties (newspaper and internet adverts). Especially individuals with lower levels of education seem to benefit from social ties in the job search process. As explained earlier, asymmetric information between employer and employee might be especially prevalent for individuals with lower levels of formal education. For individuals with a university degree, social ties become again more important to find a job. Those job seekers are more likely to dispose of valuable ties established during their studies. Furthermore, parents, relatives, and friends of individuals with university degrees are more likely to dispose of university degrees themselves
(homophily) and, thus, dispose of more valuable ties.46
No significant effects were found for being married and living with children below 18 in the household. The results remain stable if gender and child in household dummies are interacted. This shows that family composition does not affect how individuals search for jobs. It can be assumed that both families with children and without as well as married and unmarried job seekers dispose of similarly valuable social ties. As hypothesised, individuals who are not born in Germany are less likely to find a job via newspaper adverts.
Search behaviour respectively the conditions under which the new job was found are closely related to the source the search was successful through. The strongest determinant in all regressions is the active search dummy. Individuals who are actively searching for a new job (while it is controlled for being unemployed) are by far more likely to find this job via formal channels. Conversely, finding a job via friends or relatives seems to be a rather unintended process. This can be understood as a proof for Lin’s hypothesis that social capital can work in “invisible” ways (Lin, 2008: 53), i.e. passive search. Via social ties, individuals are provided with job offers they did not expect coming up or they did not search for initially. This finding is of great importance for the understanding of social ties as a search instrument. In addition
46 See Eccles (2005) for an overview of the literature on links between parental education and children’s educational achievements.
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to this, job seekers who are successful via formal ties (apart from newspaper adverts) are more likely to be unemployed before finding the new job.
Only few statistically significant results have been found for the branch dummies. This may be the case because branch categories used in this dataset do not describe the qualification or abilities required in the respective job. The given sectors provide positions for generally all kinds of professions so that few differences can be measured. Solely the manufacturing sector and the finance sector partially fulfil the expectations formulated in chapter 3.2.3. This may be the case because these two sectors – more than the others – are related to a relatively clear job model. This interpretation is supported by the relatively high correlation between branch and occupation dummies in this sector. Employees in the finance or manufacturing sector might be more homogeneous than in other branches.
As ex-ante assumed, firm size is positively related to find a job via formal channels, which has been confirmed for newspaper and internet adverts. This may be explained by greater financial and personnel resources of larger firms. Small firms without institutionalised human resource departments are more likely to find a job via informal means. Furthermore, a job seeker presumably has less ex-ante information about small firms compared to larger firms. Hence, social ties are helpful to bridge the information gap and make small firms more attractive for job seekers.
The results with reference to the job classification show that job categories which involve less formal education and skills are more likely to be found via informal means. This finding has been confirmed by additional estimates described in chapter 3.4.3. Job seekers who work in positions for employees with lower levels of education appear to benefit most from personal contacts to find a job. Social ties, therefore, are less likely to be responsible for placing well- educated and skilled employees into well-paid positions but to help disadvantaged job seekers to find a job.
Job seekers who were successful finding a job via newspaper or internet adverts are more likely to find an unlimited position. Although this factor also could be understood as an outcome of job search (as a measure for job stability), jobs with limited and unlimited contracts might differ in other regards. Fixed-term working contracts more frequently offered to females, unmarried and, younger employees (Beckmann et al., 2007). Furthermore, Portugal and Varejao (2010) argued that employers use fixed-term contracts as a screening device. They found that firms who employed more workers under fixed-term conditions were
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more likely to offer permanent contracts after a certain screening period. In relation to finding a job via social ties – which is more likely for disadvantaged job seekers – the results indicate that limited contracts are used as a means to screen those job seekers who cannot prove their abilities by formal means.
Measures at the regional level showed that the regional labour market influences how individuals find their jobs. The results indicate that job seekers in regions with higher unemployment rates are more likely to find a new job via informal means. This implies that social ties are especially helpful in order to find a job in regions with higher unemployment rates. In conjunction with the results discussed above that mainly disadvantaged job seekers benefit from social ties, this effect might be even more severe because less educated individuals suffer relatively more from high unemployment rates (OECD, 2014). Interestingly, the overall welfare, measured as the GDP per capita, does not affect job finding. Presumably, job search does not depend on the general living conditions in a region but on the amount of jobless individuals and vacancies.