The Role of Social Capital on the Searching Behaviours of a Job Seeker in the Multiple Labour Markets

Abstract

This study aims to build a two-stage theoretical model to analyse the role of social capital on the searching behaviours of a job seeker in two different markets. As the advantage of the social capital in either market triggers the reservation wages in both two markets equally, the job seeker should prioritize his or her resources enhancing a larger amount of the social capital in a particular market. Consequently, the job seeker tends to search more intensively in the market where she or he has a higher level of social capital. That is the seeker can shorten the expected searching time. The proposed model also explains why the job seeker sometimes chooses the 2nd highest wage offer instead of the highest one. JEL Classifications: C02, D83, J64