Social Networks and the Labour Market Mismatch

Kalfa, Eleni; Piracha, Matloob

doi:10.2139/ssrn.2690741

Cited by 5 publications

(5 citation statements)

References 31 publications

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“…However, further analysis of the differential effects of job search on earnings among undereducated, overeducated and exactly educated workers indicated that finding a job through social networks was consistently associated with lower earnings only for the overeducated and exactly educated, not for the undereducated. Previous studies have found that finding a job through social networks exacerbated the prevalence of overeducation (Kalfa and Piracha 2018). Although social networks are important in the labour market for securing a job, they do not necessarily lead to a higher paid job.…”

Section: Discussionmentioning

confidence: 97%

“…On the other hand, it is also possible that contacts are a source of verification of a worker's potential and would therefore result in higher wages (Montgomery 1989;Mortensen and Vishwanath 1999). Notwithstanding the large body of research into social contacts, wages and getting a job, little research to date links social capital and overeducation as Kalfa and Piracha (2018) note in their study of social networks and overeducation in Australia. They found that social capital enhances the prevalence of overeducation particularly for women.…”

Section: Job Searchmentioning

confidence: 99%

“…The possibility of sample selection into employment was taken into account in further sensitivity analysis using the Heckman selection approach to estimate employment participation prior to the earnings equations. As noted by Kalfa and Piracha (2018), as educational mismatch is only observed for those in employment, selection bias may occur if this group is non-randomly selected from the population. Selection is also considered to be more important for females given their generally lower participation rates, and gender differences in relation to matching needs to be considered in future research.…”

Section: Sensitivity Analysismentioning

confidence: 99%

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Wage effects of educational mismatch and job search in Ghana and Kenya

Carmichael

Darko

Kanji

2021

Education Economics

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Education is key to development strategies in Africa. We use overeducation and undereducation to analyse the effectiveness of education in preparing individuals for employment in Kenya and Ghana, using the Skills Towards Employment and Productivity Survey. Systematic differences in wages between matched, overeducated and undereducated workers hold across attainment levels, even controlling for cognitive skills. Overeducated workers are rewarded above exactly matched workers, partially supporting human capital theory. Undereducated workers are compensated over their education level, following the job competition model. Obtaining a job through social networks is widespread, but associated with lower wages for the overeducated and exactly matched.

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Section: Discussionmentioning

confidence: 97%

Section: Job Searchmentioning

confidence: 99%

Section: Sensitivity Analysismentioning

confidence: 99%

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Wage effects of educational mismatch and job search in Ghana and Kenya

Carmichael

Darko

Kanji

2021

Education Economics

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“…Since the higher probability of immigrant workers to be overeducated for their jobs cannot be solely explained by their educational levels, signaling theory suggests the presence of a sheepskin effect (Belman & Heywood, 1997), or the additional return of diplomas from countries that are perceived by employers as having higher value than those of other countries. More recent immigrants are also less likely to be positioned to take advantage of the established social networks that often serve as matchmakers on the labor market (Kalfa & Piracha, 2018). Social networks provide referrals to prospective employers and information about job opportunities (Fernandez et al, 2000).…”

Section: Conceptual Framework and Review Of The Literaturementioning

confidence: 99%

“…This information about access is especially critical for high-level jobs. Newly arrived immigrants without these social networks may be channeled into jobs for which they are more likely to be overeducated (Kalfa & Piracha, 2018). As immigrants integrate into the host country and expand their social networks and accumulate social capital, we should expect to observe a decrease in mismatches among immigrant workers.…”

Section: Conceptual Framework and Review Of The Literaturementioning

confidence: 99%

Do immigrants experience labor market mismatch? New evidence from the US PIAAC

Pivovarova

Powers

2022

Large-scale Assess Educ

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Background One way of evaluating immigrants’ labor market outcomes is to assess the extent to which immigrants are able to enter into jobs that are commensurate with their education and experience. An imperfect alignment between workers’ educational qualifications and these required for their current job, or education-job mismatch, has implications for both the broader economy and individual workers. In this study, we investigate the factors associated with education-job mismatches among US workers by immigrant generation. Methods We analyzed the data from the US sample of the Program for the International Assessment of Adult Competencies (PIAAC) 2012/2014. Our analytic sample included 4022 employed (full and part-time) individuals between the ages of 20–65 years. We documented the distribution of education-job mismatches across selected independent variables and estimated the relationship between the individual characteristics of workers such as race, gender, presence of children, location, time in the country and knowledge of English for first-generation immigrant workers, and education-job mismatch using multinomial logistic regressions for the full sample and for the sample of first- and second-generation workers. Results We found that on average, immigrant workers in the US labor market were more likely to hold jobs which required less education that they had (being overmatched for the job), with first-generation workers being overmatched more frequently than second-generation workers. The probability of being overmatched for immigrant workers declines with the length of stay, and workers who are proficient in English are less likely to be overmatched. Our results also suggest that there may be labor market disadvantages to immigrant status that persist beyond the first-generation. Conclusions Previous research demonstrated that over-education depresses wages and lowers workers’ standards of living and their abilities to accumulate wealth. Our findings confirm that this dynamic may be particularly acute for first- and second-generation workers who are finding it difficult to become fully integrated into US labor markets, even though the factors behind the mismatch differs between the two immigrant generations.

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