Do informal networks matter in the Ukrainian labor market?

This study is aimed at investigating the role of informal networks as a job search method in transition economy. Using the ULMS, a nationally representative survey of Ukrainian population, we investigate whether jobs obtained by means of friends, family or acquaintances' help are different in terms of wages and non-pecuniary benefits comparing to jobs found through formal channels. The results suggest that the effects are not homogenous with respect to gender. These are primarily women obtaining their jobs through informal references who experience wage loss due to the talentscontacts mismatch. At the same time, wage penalties for "connected" men reflect the existence of compensating wage differentials. The supply-side analysis is complemented by the discussion of informal references as one of the most popular recruitment practices among employers.