The Impact of Job Search Methods on Wage

Despite a lot of previous research, the relationship between preferred channels of job search and wage level remains not clearly described. Some researchers support the idea that informal job channels have a rather negative impact on the applicant’s potential wage (e.g. Bentolila et al., 2004; Diaz, 2012; Nicodemo & García, 2015). However, others claim that instead of penalty, informal job search methods result in a wage premium (e.g. Montgomery, 1991; Kugler, 2003; Antoninis, 2006). This research explores the ambiguous influence of job search methods on the wage and provides empirical insights considering specific traits of the Russian socio-economic context (Fey & Denison, 2003). We investigated how wages differ between individuals who find employment through formal applications and professional networking channels compared to those who use informal job search methods and highlighted the most influential factors that affect wage level within the specific context. The regression analysis was conducted between dependent and independent variables from the RLMS HSE dataset, which relies on probabilistic and stratified sampling. The panel data from the RLMS dataset contains detailed information about the Russian labor market for 2006-2022. On average, we have identified a premium of 1.2 - 1.6% from wage for those who use informal methods of job search: individuals who use informal job search strategies, such as referrals from friends or family, receive better compensation in terms of wage level than those with formal job search methods.