Abstract
This paper analyses the impact of informal recruitment channels on university enrolment decisions. A widespread diffusion of personal connections as an entry channel to the labour market may signal that social ties to well-off people are necessary to get a good job, thereby convincing students from poorly connected families that getting a tertiary education degree does not enhance their future socio-economic opportunities. By applying estimation techniques with instrumental variables to Italian microdata, I found that upper-secondary students coming from lower social classes are less likely to participate in tertiary education when they live in provinces where the percentage of newly tertiary graduates who found a job through informal channels is higher. My results are consistent with the hypothesis that the wide diffusion of ‘favouritism’ in local labour markets engenders a sense of ‘economic despair’ among poorly connected students, thereby worsening inequality of access to education and local socio-economic development.literature and the hypothesis
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
See this article for a brief history of the Italian university system. For its more recent evolution, see Cattaneo et al. 2017.
‘Favouritism’ is intended as ‘the action of offering jobs, contracts and resources to members of one’s own social group to the detriment of others outside the group’ (Bramoullé and Goyal 2016).
The utility of not paying tuition fees, as well as the disutility of not having time to work in the current period, are greater for low socio-economic status individuals.
A recent study by Abbiati and Barone (2016) provides fresh data on Italian students’ expectations and claims that students from low-status groups are more pessimistic about the economic returns to the investment in education, even after allowing for the objective disadvantages they face.
Data are drawn from the Tertiary Graduates Employment Survey 2015, ISTAT. The survey covers a sample of individuals who attained their tertiary degree in 2011 (interviewed in 2015).
The same procedure has been applied with regard to university quality indexes (see Table A1 for details).
Students who graduated in a province other than that of residence have been assigned the housing cost of the province in which they graduated. For students who graduated in the same province of residence, housing costs are set to zero (see Table A1 for details).
This is the oldest referendum for which data at provincial level are available. Following De Blasio and Nuzzo (2009), figures for the provinces created after 1992 (Biella, Verbania-Cusio-Ossola, Lodi, Lecco, Rimini, Prato, Crotone and Vibo Valentia) are singled out from those to which they previously belonged: respectively Vercelli, Novara, Milan, Como-Bergamo, Forlì, Florence and Catanzaro.
More precisely, in the F&F equation, the partial R squared and F statistic on the excluded instruments are 0.1055 and 74.554, respectively, suggesting that the instruments make a relevant jointly contribution in explaining the diffusion of informal recruitment channels at local level. The first stage regression is presented in Table 6 in the Appendix.
In the Italian school system, students attending high school in private institutions generally perform worse than students attending public schools (OECD 2011).
Available upon request.
In order to reduce the number of variables included in the empirical models, I tried to aggregate the provincial-related variables through a principal component analysis. Estimation results, presented in Table 8 in the Appendix, do not change.
References
Abbiati, G., & Barone, C. (2016). Is university education worth the investment? The expectations of upper secondary school seniors and the role of family background. Rationality and Society, 11(4), 463–479.
Alesina, A., Algan, Y., Cahuc, P., & Giuliano, P. (2015). Family values and the regulation of labor. Journal of the European Economic Association, 13(4), 599–630.
Angrist, J., & Pischke, S. (2009). Mostly harmless econometrics: an empiricist’s companion. Princeton: Princeton University Press.
Bandiera, O., Barankay, I., & Rasul, I. (2009). Social connections and incentives in the workplace: evidence from personnel data. Econometrica, 77(4), 1047–1094.
Banfield, E. C. (1958). The moral basis of a backward society. New York: The Free Press.
Bentolila, S., Michelacci, C., & Suarez, J. (2010). Social contacts and occupational choice. Economica, 77(305), 20–45.
Berloffa, G., Modena, F. & Villa, P. (2015). “Changing labour market opportunities for young people in Italy and the role of the family of origin”. Bank of Italy Discussion Paper No. 998, Rome.
Bertrand, M., & Schoar, A. (2006). The role of family in family firms. Journal of Economic Perspectives, 20(2), 73–96.
Boaretto, A., Rota, G., Silvestri, I., & Fabbris, L. (2007). Networks of weak ties of Padua University graduates searching for employment. In L. Fabbris (Ed.), Effectiveness of university education in Italy (pp. 123–139). Heidelberg: Physica-Verlag.
Bound, J., Jaeger, D. A., & Baker, R. M. (1995). Problems with instrumental variables estimation when the correlation between the instruments and the endogenous explanatory variable is weak. Journal of the American Statistical Association, 90(430), 443–450.
Bowles, S., & Gintis, H. (2002). The inheritance of inequality. The Journal of Economic Perspectives, 16(3), 3–30.
Bramoullé, Y., & Goyal, S. (2016). Favoritism. Journal of Development Economics, 122(C), 16–27.
Cattaneo, M., Malighetti, P., Meoli, M., & Paleari, S. (2017). University spatial competition for students: the Italian case. Regional Studies, 51(5), 750–764.
Cingano, F., & Rosolia, A. (2012). People I know: Job search and social networks. Journal of Labor Economics, 30(2), 291–320.
Cobalti, A., & Schizzerotto, A. (1994). La mobilità sociale in Italia. Bologna: Il Mulino.
Coco, G., & Lagravinese, R. (2014). Cronyism and education performance. Economic Modelling, 38, 443–450.
De Blasio, G., & Nuzzo, G. (2009). Historical traditions of civicness and local economic development. Journal of Regional Science, 50(4), 833–857.
Di Pietro, G., & Cutillo, A. (2008). Degree flexibility and university drop-out. Economics of Education Review, 27(5), 546–555.
Dickinson, D.L., Masclet, D. & Peterle E. (2017). “Discrimination as favouritism: the private benefits and social costs of in-group favouritism in an experimental labor market. CRESE Working Paper no 2017–04, Besançon.
Dolton, P., & Vignoles, A. (2002). Is a broader curriculum better? Economics of Education Review, 21(5), 415–429.
Gagliarducci, S., & Manacorda, M. (2016). “Politics in the family: nepotism and the hiring decisions of Italian firms”. Iza Discussion Paper No. 9841, Bonn.
Ghignoni, E. (2016). Family background and university dropouts during the crisis: the case of Italy. Higher Education, 71(4), 1–25.
Goldberg, S. M. (1982). Discrimination, nepotism, and long-run wage differentials. Quarterly Journal of Economics, 97(2), 307–319.
Hillman, N. W., & Orians, E. L. (2013). Community colleges and labor market conditions: how does enrollment demand change relative to local unemployment rates? Research in Higher Education, 54(7), 765–780.
Holzer, H. (1988). Search method use by unemployed youth. Journal of Labor Economics, 6(1), 1–20.
Ioannides, M., & Loury, L. (2004). Job information networks, neighborhood effects, and inequality. Journal of Economic Literature, 42(4), 1056–1093.
ISFOL-Plus data. (2010, 2014). Available at: http://isfoloa.isfol.it/jspui/handle/123456789/675. Accessed 11 Mar 2016.
ISTAT. (2011). L’inserimento professionale dei laureati. Rome: ISTAT.
Jackson, M. O., & Zenou, Y. (2013). economic analyses of social networks. Cheltenham: Edward Elgar Publishing.
Kearney, M. S., & Levine, P. B. (2014). Income inequality and early nonmarital childbearing. Journal of Human Resources, 49(1), 1–31.
Kearney, M. S., & Levine, P. B. (2016). Income inequality, social mobility, and the decision to drop out of high school. Brookings Papers on Economic Activity, 2016, 333–380.
Kunze, L., & Suppa, N. (2017). Bowling alone or bowling at all? The effect of unemployment on social participation. Journal of Economic Behavior & Organization, 133, 213–235. https://doi.org/10.1016/j.jebo.2016.11.012.
Laband, D. N., & Lentz, B. F. (1989). Why so many children of doctors become doctors: nepotism vs. human capital transfers. The Journal of Human Resources, 24(3), 396–413.
Laband, D. N., & Lentz, B. F. (1992). Self-recruitment in the legal profession. Journal of Labor Economics, 10(2), 182–201.
OECD. (2011). Education at a glance 2011: OECD indicators. Paris: OECD Publishing.
OECD. (2015). Education at a glance 2015: OECD indicators. Paris: OECD Publishing.
Ozer Balli, H., & Sørensen, B. E. (2013). Interaction effects in econometrics. Empirical Economics, 45(1), 583–603.
Pellizzari, M. (2010). Do friends and relatives really help in getting a good job? Industrial and Labor Relations Review, 63(3), 494–510.
Pistaferri, L. (1999). Informal networks in the Italian labor market. Giornale degli Economisti e Annali di Economia Nuova Serie, 58(3/4), 355–375.
Ponzo, M., & Scoppa, V. (2010). The use of informal networks in Italy: efficiency or favoritism? The Journal of Socio-Economics, 39(1), 89–99.
Putnam, R. (1993). Making democracy work: civic tradition in modern Italy. Princeton: Princeton University Press.
Raitano, M., & Vona, F. (2018). From the cradle to the grave: the effect of family background on the career path of Italian men. Oxford Bulletin of Economics and Statistics, 80(6), 1062–1088.
Scoppa, V. (2009). Intergenerational transfers of public sector jobs: a shred of evidence on nepotism. Public Choice, 141(1/2), 167–188.
Thomas, J. (1997). Public employment agencies and unemployment spells: reconciling the experimental and nonexperimental evidence. Industrial and Labor Relations Review, 50(4), 667–683.
Triventi, M., & Trivellato, P. (2009). Participation, performance and inequality in Italian higher education in the 20th century. Higher Education, 57(6), 681–702.
Try, S. (2005). The use of job search strategies among university graduates. The Journal of Socio Economics, 34(2), 223–243.
Wilson, W. J. (1987). The truly disadvantaged: the inner city, the underclass and public policy. Chicago: University of Chicago Press.
Wooldridge, J. M. (2002). Econometric analysis of cross-section and panel data. Cambridge: The MIT Press.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendix
Appendix
Factor analysis
In order to reduce the number of variables in the regression analysis, I applied a principal component analysis (PCA). In particular, as I think that it is important to single out the effect of the individual and university-related characteristics, I aggregated through a PCA all the provincial variables except those related to university costs and quality. All these variables show a weak impact on the probability of enrolling and can be easily aggregated without much loss of information
The PCA retained two factors, explaining more than 55% of total variability. After a varimax rotation, the interpretation of the two factors became clearer (see Table 7). The first rotated factor seems to be related more to the economic conditions of the province of residence (employment rates, migration rate, and added value) whereas the second one is associated to cultural and social conditions (No. of degree courses, percentage of population with a tertiary degree and youth crime rate)
Rights and permissions
About this article
Cite this article
Ghignoni, E. Informal recruitment channels, family background and university enrolments in Italy. High Educ 81, 815–841 (2021). https://doi.org/10.1007/s10734-020-00578-3
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10734-020-00578-3