Impact of informal job-search on wages for university graduates in Egypt and Jordan

Abstract EN

This research examines the impact of informal job search on wage for university graduates on the first entry to the job-market and after making some experience.

Informal job search is affected by unobserved factors related to productivity, peers effects, employers, which influence wage and cause endogeneity in empirical models.

We use data from the Higher Education Graduates Survey 2012 in Egypt and Jordan, and apply the generalized empirical likelihood method GEL and GMM method to control for endogeneity and correct the bias in the estimates.

Our results show wage penalties in Egypt that reach 11% and 38% for informal job-search in the first two jobs after graduation, respectively, but no evidence of effect in Jordan.

We recommend that universities should establish job career offices to help graduates search and find suitable jobs at their area of expertise and originate effective work experience trajectory.