Finding a job through social networks: monetary and nonmonetary returns for employed and unemployed job seekers

Abstract This study examines the impact of job vacancy information obtained through personal contacts on monetary and nonmonetary job search outcomes. We hypothesise that the effects will be positive for both kinds of outcome, and that these effects may depend on employment status prior to finding a new job. Additionally, we hypothesise that information from professional personal contacts will lead to better job search outcomes than information from private personal contacts. We use panel data from the German Panel Study “Labour Market and Social Security” (PASS) and fixed effects regressions to test these hypotheses. Monetary outcomes are measured by wages and nonmonetary outcomes by job satisfaction. Overall, we find that the employed tend to benefit more than the unemployed. However, the specific pattern differs depending on whether vacancy information stems from personal or professional contacts and on the type of outcome (monetary or nonmonetary).