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The causal effect of informal job search on wage and job satisfaction: evidence from Egypt and Jordan using random forest method

Obbey Ahmed Elamin (Department of Economics, College of Business Administration, King Faisal University, Al-Ahsa, Saudi Arabia)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 2 December 2022

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Abstract

Purpose

This study aims to examine the impact of finding a job through family and friend contacts on employees' wages and job satisfaction.

Design/methodology/approach

This study uses machine learning techniques in economics to estimate the causal effect of being hired through informal contacts on wages and job satisfaction using cross-sectional data from the Higher Education Graduates Survey 2012 (HEGS, 2012) in Egypt and Jordan.

Findings

The author's results confirm that negative and positive consequences are likely to occur. In Egypt, a wage penalty of 28% is estimated in the starting wage, but the impact diminishes in the last wage. By contrast, in Jordan, no penalty is captured in the starting wage, but a premium of 10% is estimated in the last wage. Job satisfaction is negatively affected by the penalty in the starting wage.

Social implications

Job market search methods that allow for professional job referrals, facilitate more efficient information transfer between job-seekers and employers and provide opportunities for job-seekers with weak social capital should be implemented to lower dependence on informal search methods.

Originality/value

The research provides comprehensive evidence about finding a job through informal contact with employees' well-being. The consequences of finding a job using family and friends' contacts, whether positive or negative, cannot be ignored. Future research could benefit from the findings of this study.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2022-0318.

Keywords

Acknowledgements

The author would like to thank Mr Hisham Elhaggaz for the support provided and is grateful for the crucial support of colleagues in the Economic Research Forum and for providing access to the data for conducting this research. The author would like to thank colleagues in the Department of Economics and College of Business Administration at King Faisal University and also the editors and the staff at the International Journal of Social Economics. The author's deep gratitude goes to Len Gill and Martyn Andrews at the University of Manchester.

Citation

Elamin, O.A. (2022), "The causal effect of informal job search on wage and job satisfaction: evidence from Egypt and Jordan using random forest method", International Journal of Social Economics, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJSE-05-2022-0318

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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