Social Capital and Employment: Evidence using Kenyan data

Abstract

The contribution of social capital to employment has not been accorded much attention in literature. Filling this gap and supporting employment policy, this study investigates the influence of social capital on employment using cross-sectional household data from Kenya. Social capital supports the symmetric flow of labor information as an innovative tool that allocates and distributes labor market information to individuals within the working-age population (15-64). We apply data from the 2015/16 Kenya Integrated Household Budget Survey to the left-censored Tobit and OLS estimators. By using the Control Function Approach, our results control for both endogeneity and heterogeneity and are empirically robust. The findings indicate that social capital positively and significantly supports employment and may complement human educational capital, which alone may be inadequate in linking individuals to available job opportunities, especially in presence information asymmetry. We further observe that hours worked increase with the prevailing wage rate, males work for longer hours than females in an ordinary week, and relatively younger individuals work for more hours than their somewhat older counterparts.