The impact of welfare and labour market institutions on informal recruitment in European youth labour markets

Abstract:

Youth labour markets where informal recruitment practices predominate are likely to amplify existing inequalities among young job seekers. Whereas most literature on informal recruitment focuses on characteristics of individual job seekers and the nature of the jobs they obtain, this article suggests to relate this important issue to overarching dynamics of welfare and labour market institutions. Analyses of survey data among young people with a history of longer-term unemployment in eight European countries suggest that comprehensive welfare state arrangements may substitute for the importance of personal network resources in the job search process. Thus the welfare state may intervene by providing active measures to facilitate the job-matching process and by providing economic means to make young people less dependent on their social network. The level of youth unemployment also seems to be related to the extent of informal recruitment, which is found to be more widespread in the countries with high rates of youth unemployment.