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Social Ties and the Job Search of Recent Immigrants

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  • Deepti Goel
  • Kevin Lang

Abstract

We show that increasing the probability of obtaining a job offer through the network should raise the observed mean wage in jobs found through formal (non-network) channels relative to that in jobs found through the network. This prediction also holds at all percentiles of the observed wage distribution, except the highest and lowest. The largest changes are likely to occur below the median. We test and conrm these implications using a survey of recent immigrants to Canada. We also develop a simple structural model, consistent with the theoretical model, and show that it can replicate the broad patterns in the data. For recent immigrants, our results are consistent with the primary effect of strong networks being to increase the arrival rate of offers rather than to alter the distribution from which offers are drawn.

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Bibliographic Info

Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 148.

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Length: 29 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:cca:wpaper:148

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Keywords: social networks; search; close ties; wage determination; employment; unemployment;

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References

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  1. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2004. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working papers 2004-07, University of Connecticut, Department of Economics, revised Oct 2005.
  2. Lori A. Beaman, 2012. "Social Networks and the Dynamics of Labour Market Outcomes: Evidence from Refugees Resettled in the U.S," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 128-161.
  3. Picot, Garnett & Sweetman, Arthur, 2005. "The Deteriorating Economic Welfare of Immigrants and Possible Causes: Update 2005," Analytical Studies Branch Research Paper Series 2005262e, Statistics Canada, Analytical Studies Branch.
  4. Hou, Feng & Picot, Garnett, 2003. "Visible Minority Neighbourhood Enclaves and Labour Market Outcomes of Immigrants," Analytical Studies Branch Research Paper Series 2003204e, Statistics Canada, Analytical Studies Branch.
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  7. Dustmann, Christian & Glitz, Albrecht & Schönberg, Uta, 2011. "Referral-based Job Search Networks," IZA Discussion Papers 5777, Institute for the Study of Labor (IZA).
  8. Kugler, Adriana D., 2002. "Employee Referrals and Efficiency Wages," CEPR Discussion Papers 3682, C.E.P.R. Discussion Papers.
  9. Glaeser, Edward L & Sacerdote, Bruce & Scheinkman, Jose A, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 507-48, May.
  10. Michele Pellizzari, 2004. "Do friends and relatives really help in getting a good job?," LSE Research Online Documents on Economics 19980, London School of Economics and Political Science, LSE Library.
  11. Patel, Krishna & Vella, Francis, 2007. "Immigrant Networks and Their Implications for Occupational Choice and Wages," IZA Discussion Papers 3217, Institute for the Study of Labor (IZA).
  12. Kaivan Munshi, 2003. "Networks In The Modern Economy: Mexican Migrants In The U.S. Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(2), pages 549-599, May.
  13. Marmaros, David & Sacerdote, Bruce, 2002. "Peer and social networks in job search," European Economic Review, Elsevier, vol. 46(4-5), pages 870-879, May.
  14. Edin, Per-Anders & Fredriksson, Peter & Åslund, Olof, 2000. "Ethnic enclaves and the economic success of immigrants - evidence from a natural experiment," Working Paper Series 2000:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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Citations

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Cited by:
  1. Cappellari, Lorenzo & Tatsiramos, Konstantinos, 2010. "Friends' Networks and Job Finding Rates," IZA Discussion Papers 5240, Institute for the Study of Labor (IZA).
  2. Luciana Méndez Errico, 2013. "The Impacts of Social Networks on Immigrants’ Employment Prospects: The Spanish Case 1997-2007," Working Papers wpdea1301, Department of Applied Economics at Universitat Autonoma of Barcelona.
  3. Tommaso Colussi, 2013. "Migrant Networks and Job Search Outcomes: Evidence from Displaced Workers," Working Papers 706, Queen Mary, University of London, School of Economics and Finance.
  4. Isabelle Chort, 2013. "Migrant network and immigrants’ occupational mismatch," Working Papers DT/2013/04, DIAL (Développement, Institutions et Mondialisation).
  5. Patacchini, Eleonora & Zenou, Yves, 2012. "Ethnic networks and employment outcomes," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 938-949.
  6. Audra J. Bowlus & Masashi Miyairi & Chris Robinson, 2013. "Immigrant Job Search Assimilation in Canada," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20136, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  7. Christian Dustmann & Albrecht Glitz & Uta Schoenberg, 2011. "Referral-based Job Search Networks," Norface Discussion Paper Series 2011012, Norface Research Programme on Migration, Department of Economics, University College London.
  8. Nicodemo, Catia & Nicolini, Rosella, 2012. "Random or Referral Hiring: When Social Connections Matter," IZA Discussion Papers 6312, Institute for the Study of Labor (IZA).
  9. Arceo-Gómez, Eva Olimpia, 2012. "Job Search, Networks, and Labor Market Performance of Immigrants," MPRA Paper 44533, University Library of Munich, Germany.
  10. repec:ese:iserwp:2011-21 is not listed on IDEAS

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