Abstract
Heterogeneity of workers and jobs results in imperfections such as information asymmetry in the labour market. Acquisition and evaluation of information by buyers and sellers to arrive at a decision is, therefore, both difficult and costly. Referrals in the labour market act as a conduit through which necessary information flows between prospective employers and job seekers, thereby reducing problems associated with information asymmetry. The information technology (IT) industry hires about a quarter of their workforce through referrals. We look at realised job search outcomes of IT workers some of whom have found jobs through informal methods of search deploying their social networks while others through formalised channels of recruitment. We examine social capital, human capital and firm-specific differences among those who found jobs through formal vis-a-vis informal methods of search. The empirical analysis is primarily descriptive and is based on a survey conducted among software workers in the IT industry in Bangalore. The results suggest that there are no significant differences in the human capital characteristics of workers between the two methods of job finding. However, certain social capital and firm-specific characteristics significantly differ among the methods of job finding.
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Pradeep, D., Muraleedharan, S. Job Search Methods in the Software Industry in Bangalore: Does Social Capital Matter?. Ind. J. Labour Econ. 61, 681–699 (2018). https://doi.org/10.1007/s41027-019-00155-y
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DOI: https://doi.org/10.1007/s41027-019-00155-y