This study examines how formal sector employment affects the worker’s job search methods in Mexico. It studies how each worker and workplace characteristic is associated with the probability of using each job search method as opposed to private/public agencies using a multinomial logit model. It also examines a differential effect of using friends and family search in different sizes of town: the bigger the size of town, the more rewarding is friends and family search in terms of real monthly wages, and the possibility that the position offers any work-related benefits. In addition, it finds that using formal job search methods such as friends/family search, advertisement, internet search is associated with a slightly larger probability of that position being in the formal sector for males than females, while using direct approach is associated with a significantly larger probability of that position being in the formal sector for females than males. Importantly, it argues that the return to searching through friends and family is bigger in terms of real monthly income in towns of smaller sizes, even though larger towns are associated with higher real monthly income.