Advanced Search
MyIDEAS: Login to save this paper or follow this series

Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes

Contents:

Author Info

  • Patrick Bayer

    ()
    (Economic Growth Center, Yale University)

  • Stephen L. Ross

    (Economics Department, University of Connecticut)

  • Giorgio Topa

    (Federal Reserve Bank of New York)

Abstract

We use a novel dataset and research design to empirically detect the effect of social interactions among neighbors on labor market outcomes. Specifically, using Census data that characterize residential and employment locations down to the city block, we examine whether individuals residing in the same block are more likely to work together than those in nearby blocks. We find evidence of significant social interactions operating at the block level: residing on the same versus nearby blocks increases the probability of working together by over 33 percent. The results also indicate that this referral effect is stronger when individuals are similar in sociodemographic characteristics (e.g., both have children of similar ages) and when at least one individual is well attached to the labor market. These findings are robust across various specifications intended to address concerns related to sorting and reverse causation. Further, having determined the characteristics of a pair of individuals that lead to an especially strong referral effect, we provide evidence that the increased availability of neighborhood referrals has a significant impact on a wide range of labor market outcomes including employment and wages.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.econ.yale.edu/growth_pdf/cdp927.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 927.

as in new window
Length: 35 pages
Date of creation: Nov 2005
Date of revision:
Handle: RePEc:egc:wpaper:927

Contact details of provider:
Postal: PO Box 8269, New Haven CT 06520-8269
Phone: (203) 432-3610
Fax: (203) 432-3898
Web page: http://www.econ.yale.edu/
More information through EDIRC

Related research

Keywords: Neighborhood Effects; Job Referrals; Social Interactions; Social Interactions; Social Networks; Labor Supply;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Addison, John T. & Portugal, Pedro, 2001. "Job Search Methods and Outcomes," IZA Discussion Papers 349, Institute for the Study of Labor (IZA).
  2. Antoni Calvó-Armengol & Matthew O. Jackson, 2004. "The Effects of Social Networks on Employment and Inequality," American Economic Review, American Economic Association, vol. 94(3), pages 426-454, June.
  3. Daniel Aaronson, . "Using Sibling Data to Estimate the Impact of Neighborhoods on Children's Educational Outcomes," IPR working papers 95-20, Institute for Policy Resarch at Northwestern University.
  4. Oriana Bandiera & Imran Rasul, 2002. "Social Networks and Technology Adoption in Northern Mozambique," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 35, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  5. Philip Oreopoulos, 2003. "The Long-Run Consequences Of Living In A Poor Neighborhood," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1533-1575, November.
  6. David M. Cutler & Edward L. Glaeser, 1995. "Are Ghettos Good or Bad?," NBER Working Papers 5163, National Bureau of Economic Research, Inc.
  7. Wahba, Jackline & Zenou, Yves, 2004. "Density, Social Networks and Job Search Methods: Theory and Application to Egypt," Working Paper Series 629, Research Institute of Industrial Economics.
  8. Lawrence Katz & B. Jeffrey Liebman, 2000. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," Working Papers 820, Princeton University, Department of Economics, Industrial Relations Section..
  9. Aizer, Anna & Currie, Janet, 2004. "Networks or neighborhoods? Correlations in the use of publicly-funded maternity care in California," Journal of Public Economics, Elsevier, vol. 88(12), pages 2573-2585, December.
  10. Susan J. Popkin & James E. Rosenbaum & Patricia M. Meaden, 1993. "Labor market experiences of low-income black women in middle-class suburbs: Evidence from a survey of gautreaux program participants," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(3), pages 556-573.
  11. Topa, Giorgio, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 68(2), pages 261-95, April.
  12. Katherine M. O'Regan and John M. Quigley., 1995. "Teenage Employment and the Spatial Isolation of Minority and Poverty Households," Economics Working Papers 95-239, University of California at Berkeley.
  13. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
  14. Addison, John T. & Portugal, Pedro, 1998. "Job Search Methods and Outcomes," ZEW Discussion Papers 98-41, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  15. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 1999. "Network Effects and Welfare Cultures," Working Papers 9903, Harris School of Public Policy Studies, University of Chicago.
  16. Jackson, Matthew O. & Calvo, Antoni, 2002. "Social Networks in Determing Employment and Wages: Patterns, Dynamics, and Inequality," Working Papers 1149, California Institute of Technology, Division of the Humanities and Social Sciences.
  17. Jeffrey S. Zax & Daniel I. Rees, 2002. "IQ, Academic Performance, Environment, and Earnings," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 600-616, November.
  18. Flachaire, Emmanuel, 2005. "Bootstrapping heteroskedastic regression models: wild bootstrap vs. pairs bootstrap," Computational Statistics & Data Analysis, Elsevier, vol. 49(2), pages 361-376, April.
  19. Esther Dufluo & Emmanuel Saez, 2003. "The role of information and social interactions in retirement plan decisions: Evidence from a randomized experiment," Framed Field Experiments 00141, The Field Experiments Website.
  20. Emmanuel Flachaire, 1999. "A better way to bootstrap pairs," Post-Print halshs-00175892, HAL.
  21. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
  22. Manski, C.F., 1991. "Identification of Endogenous Social Effects: the Reflection Problem," Working papers 9127, Wisconsin Madison - Social Systems.
  23. Brian A. Jacob, 2004. "Public Housing, Housing Vouchers, and Student Achievement: Evidence from Public Housing Demolitions in Chicago," American Economic Review, American Economic Association, vol. 94(1), pages 233-258, March.
  24. Jaffe, A.B. & Trajtenberg, M., 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," Papers 14-92, Tel Aviv.
  25. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366.
  26. Weinberg, Bruce A., 2004. "Testing the spatial mismatch hypothesis using inter-city variations in industrial composition," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 505-532, September.
  27. Marmaros, David & Sacerdote, Bruce, 2002. "Peer and social networks in job search," European Economic Review, Elsevier, vol. 46(4-5), pages 870-879, May.
  28. Ignacio Palacios-Huerta, 2002. "Learning to Open Monty Hall's Doors," Working Papers 2002-23, Brown University, Department of Economics.
  29. David Card & Jesse Rothstein, 2005. "Racial Segregation and the Black-White Test Score Gap," Working Papers 93, Princeton University, Department of Economics, Center for Economic Policy Studies..
  30. 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.
  31. Conley, T.G. & Udry, C.R., 2000. "Learning about a New Technology: Pineapple in Ghana," Papers 817, Yale - Economic Growth Center.
  32. Patrick Bayer & Randi Hjalmarsson & David Pozen, 2007. "Building Criminal Capital behind Bars: Peer Effects in Juvenile Corrections," NBER Working Papers 12932, National Bureau of Economic Research, Inc.
  33. William A. Brock & Steven N. Durlauf, 2000. "Interactions-Based Models," Working Papers 00-05-028, Santa Fe Institute.
  34. Linda Datcher Loury, 2004. "Some Job Contacts are More Equal Than Others: Earnings and Job Information Networks," Discussion Papers Series, Department of Economics, Tufts University 0404, Department of Economics, Tufts University.
  35. Glenn Ellison & Edward L. Glaeser, 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," NBER Working Papers 4840, National Bureau of Economic Research, Inc.
  36. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-55, June.
  37. Case, A.C. & Katz, L.F., 1991. "The Company You Keep: The Effects Of Family And Neighborhood On Disadvantaged Younths," Harvard Institute of Economic Research Working Papers 1555, Harvard - Institute of Economic Research.
  38. Caroline Hoxby, 2000. "Peer Effects in the Classroom: Learning from Gender and Race Variation," NBER Working Papers 7867, National Bureau of Economic Research, Inc.
  39. Esther Duflo & Emmanuel Saez, 2002. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," NBER Working Papers 8885, National Bureau of Economic Research, Inc.
  40. Bruce Sacerdote, 2001. "Peer Effects With Random Assignment: Results For Dartmouth Roommates," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 681-704, May.
  41. Ross, Stephen L., 1998. "Racial Differences in Residential and Job Mobility: Evidence Concerning the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 43(1), pages 112-135, January.
  42. E. Glaeser & B. Sacerdote & Jose A. Scheinkman, 2003. "The Social Multiplier," Levine's Working Paper Archive 506439000000000130, David K. Levine.
  43. Weinberg, Bruce A., 2000. "Black Residential Centralization and the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 48(1), pages 110-134, July.
  44. repec:fth:louvco:9924 is not listed on IDEAS
  45. Holzer, Harry J, 1988. "Search Method Use by Unemployed Youth," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 1-20, January.
  46. Jens Ludwig & Greg J. Duncan & Paul Hirschfield, 2001. "Urban Poverty And Juvenile Crime: Evidence From A Randomized Housing-Mobility Experiment," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 655-679, May.
  47. Zimmerman, David J., 1999. "Peer Effects in Academic Outcomes: Evidence From a Natural Experiment," Williams Project on the Economics of Higher Education DP-52, Department of Economics, Williams College.
  48. Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  49. Bruce A. Weinberg & Patricia B. Reagan & Jeffrey J. Yankow, 2004. "Do Neighborhoods Affect Hours Worked? Evidence from Longitudinal Data," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 891-924, October.
  50. Ihlanfeldt, Keith R & Sjoquist, David L, 1990. "Job Accessibility and Racial Differences in Youth Employment Rates," American Economic Review, American Economic Association, vol. 80(1), pages 267-76, March.
  51. Harry J. Holzer, 1986. "Informal Job Search and Black Youth Unemployment," NBER Working Papers 1860, National Bureau of Economic Research, Inc.
  52. Evans, William N & Oates, Wallace E & Schwab, Robert M, 1992. "Measuring Peer Group Effects: A Study of Teenage Behavior," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 966-91, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is featured on the following reading lists or Wikipedia pages:

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:egc:wpaper:927. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Danishevsky).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.