Journal of Population Economics

, Volume 31, Issue 3, pp 837–876 | Cite as

Informal search, bad search?: the effects of job search method on wages among rural migrants in urban China

  • Yuanyuan Chen
  • Le WangEmail author
  • Min Zhang
Original Paper


The use of informal job search method is prevalent in many countries. There is, however, no consensus in the literature on whether it actually matters for wages, and if it does, what are the underlying mechanisms. We empirically examine these issues specifically for rural migrants in urban China, a country where one of the largest domestic migration in human history has occurred over the past decades. We find that there exists a significant wage penalty for those migrant workers who have conducted their search through informal channels, despite their popularity. Our further analysis suggests two potential reasons for the wage penalty: (1) the informal job search sends a negative signal (of workers’ inability to successfully find a job in a competitive market) to potential employers, resulting in lower wages, and (2) there exists a trade-off between wages and search efficiency for quicker entry into local labor market. We also find some evidence that the informal job search may lead to low-skilled jobs with lower wages. We do not find strong evidence supporting alternative explanations.


Social network Rural-urban migrants Wage Search friction Information asymmetry Chinese economy 

JEL Classification

J31 J64 P2 P5 



We thank Kevin Lang, Ming Lu, Shangjin Wei, Jeff Zax, Junsen Zhang, two knowledgeable anonymous referees, and seminar participants at various seminars and conferences for their helpful comments. All errors are our own.

Funding Information

Min Zhang thanks the financial support from the National Natural Science Foundation of China (Grant No. 71673172 and No. 71203132). Chen’s research is supported by the National Science Foundation of China (71773074), National Science Foundation of China Youth Program (71303149), the Shanghai Soong Ching Ling Foundation (Lu Jiaxian and Gao Wenying Special Foundation), and the Program for Innovative Research Team of Shanghai University of Finance and Economics (2014110310).

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.


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Copyright information

© Springer-Verlag GmbH Germany 2017

Authors and Affiliations

  1. 1.Shanghai University of Finance and Economics, Key Laboratory of Mathematical Economics (SUFE), Ministry of EducationShanghaiChina
  2. 2.Department of EconomicsUniversity of OklahomaNormanUSA
  3. 3.IZABonnGermany
  4. 4.Faculty of Economics and ManagementEast China Normal UniversityShanghaiChina

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