Informal recruitment channels, family background and university enrolments in Italy

Abstract

This paper analyses the impact of informal recruitment channels on university enrolment decisions. A widespread diffusion of personal connections as an entry channel to the labour market may signal that social ties to well-off people are necessary to get a good job, thereby convincing students from poorly connected families that getting a tertiary education degree does not enhance their future socio-economic opportunities. By applying estimation techniques with instrumental variables to Italian microdata, I found that upper-secondary students coming from lower social classes are less likely to participate in tertiary education when they live in provinces where the percentage of newly tertiary graduates who found a job through informal channels is higher. My results are consistent with the hypothesis that the wide diffusion of ‘favouritism’ in local labour markets engenders a sense of ‘economic despair’ among poorly connected students, thereby worsening inequality of access to education and local socio-economic development.literature and the hypothesis