A JOB SEARCH MODEL WITH SOCIAL NETWORKS

Do social networks induce better matches? To investigate this issue, we provide a flexible job search model where workers use formal methods of search and social networks to get a job. In this framework, we show that it is not possible to identify the effect of networks on the allocation of workers using informations about wages. We provide another method to test this effect and present a structural estimation of our model using ECHP data for France. Our results show that networks do not induce, on average, more productive matches.