Informal Recruitment Methods and Disadvantages of Immigrants in the Swedish Labour Market

Abstract

This paper examines the probability of success for different methods of finding employment in the Swedish labour market, in times of both economic growth and decline. Existing West European studies on hiring processes have not allowed researchers to examine the relationship between job contacts and wage income among various groups of immigrants. Since our dataset is sufficiently large, this article examines job-finding strategies and labour market outcomes for individuals within two large groups, immigrants and natives. By studying those who have been in their current jobs for one year or less, the paper investigates to what extent both natives and immigrants use their social networks to find a job, and how informal job-finding methods are related to the rate of return in the Swedish labour market for the job secured, in terms of hourly wage. The findings show that immigrants, compared to natives, are less likely to be able to find jobs through informal methods and that jobs found through informal methods do not pay as well for immigrants as for natives.