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<p>This paper investigates the factors influencing workers’ choices between social networks and government-sponsored mechanisms for job matching and the subsequent impact of social networks on labour market outcomes. Utilizing a distinctive database from Hawassa Industrial Park in Ethiopia, a recently established export-oriented industrial complex specializing in textiles and garments, the study focuses on low-skilled new entrants—primarily young, rural migrant females facing diverse information challenges. The findings reveal that individuals with strong family or friend bonds, advanced cognitive skills leading to heightened technical proficiency, and a higher occupational status are more likely to opt for social networks in their job search and matching endeavours. Furthermore, the findings support the notion that workers recruited through social networks enjoy wage premia. However, contrary to expectations, these wage premia do not contribute to longer job tenures; instead, workers tend to switch jobs more frequently, driven by other non-wage benefits.</p>

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Social Networks, Job Matching and Labor Market Outcomes in Low-Skilled Jobs: Evidence from Ethiopia

  • 期刊论文

  • 发表日期：

    2026年4月14日

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  • Fekadu Nigussie Deresse,
  • Mulu Gebreeyesus,
  • David Qihang Wu,
  • Christian Samen Otchia

摘要

This paper investigates the factors influencing workers’ choices between social networks and government-sponsored mechanisms for job matching and the subsequent impact of social networks on labour market outcomes. Utilizing a distinctive database from Hawassa Industrial Park in Ethiopia, a recently established export-oriented industrial complex specializing in textiles and garments, the study focuses on low-skilled new entrants—primarily young, rural migrant females facing diverse information challenges. The findings reveal that individuals with strong family or friend bonds, advanced cognitive skills leading to heightened technical proficiency, and a higher occupational status are more likely to opt for social networks in their job search and matching endeavours. Furthermore, the findings support the notion that workers recruited through social networks enjoy wage premia. However, contrary to expectations, these wage premia do not contribute to longer job tenures; instead, workers tend to switch jobs more frequently, driven by other non-wage benefits.