The informal recruitment channel and the quality of jo-worker matches. An analysis on Italian survey data

This article analyzes the consequences of being recruited through the informal channel in the Italian labor market using data collected through a new survey implemented by Institute for the Development of the Vocational Training of Workers—ISFOL. We find that, while workers entering the labor market via “professional ties” enjoy a wage bonus and a reduction in entry times, those recruited via “family and friends” referrals save on entry times but receive on average lower wages. Moreover, the use of the family channel reduces the returns to education and is associated with the phenomenon of “over-education,” suggesting the existence of some mismatches between workers’ and jobs’ characteristics.