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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 a network should raise the observed wages of workers in jobs found through formal channels relative to those in jobs found through the network. This prediction holds at all percentiles except the highest and lowest. The largest changes are likely to occur below the median of the offer distribution. We test and confirm these implications using a survey of recent immigrants into Canada. We develop a simple structural model consistent with the theoretical model and show that it can replicate the broad patterns in the data. Our results are consistent with the primary effect of network strength being to increase the arrival rate of offers rather than to alter the distribution from which offers are drawn at least among recent immigrants.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15186.

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Date of creation: Jul 2009
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Handle: RePEc:nbr:nberwo:15186

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  1. Marianne Bertrand & Erzo F.P. Luttmer & Sendhil Mullainathan, 1998. "Network Effects and Welfare Cultures," NBER Working Papers 6832, National Bureau of Economic Research, Inc.
  2. 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.
  3. Javier Suarez & Samuel Bentolila & Claudio Michelacci, 2004. "Social Contacts and Occupational Choice," 2004 Meeting Papers 593, Society for Economic Dynamics.
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  5. Krishna Patel & Francis Vella, 2013. "Immigrant Networks and Their Implications for Occupational Choice and Wages," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1249-1277, October.
  6. Dustmann, Christian & Glitz, Albrecht & Schönberg, Uta, 2011. "Referral-based Job Search Networks," IZA Discussion Papers 5777, Institute for the Study of Labor (IZA).
  7. Edward P. Lazear, 1995. "Culture and Language," NBER Working Papers 5249, National Bureau of Economic Research, Inc.
  8. 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.
  9. Edward E. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995. "Crime and Social Interactions," Harvard Institute of Economic Research Working Papers 1738, Harvard - Institute of Economic Research.
  10. Borjas, George J, 1995. "Ethnicity, Neighborhoods, and Human-Capital Externalities," American Economic Review, American Economic Association, vol. 85(3), pages 365-90, June.
  11. Kugler, Adriana, 2002. "Employee Referrals and Efficiency Wages," IZA Discussion Papers 633, Institute for the Study of Labor (IZA).
  12. 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.
  13. Borjas, George J, 1992. "Ethnic Capital and Intergenerational Mobility," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 123-50, February.
  14. 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.
  15. Edin, Per-Anders & Fredriksson, Peter & Åslund, Olof, 2000. "Ethnic Enclaves and the Economic Success of Immigrants - Evidence from a Natural Experiment," Working Paper Series 2000:21, Uppsala University, Department of Economics.
  16. Marmaros, David & Sacerdote, Bruce, 2002. "Peer and social networks in job search," European Economic Review, Elsevier, vol. 46(4-5), pages 870-879, May.
  17. Hellerstein, Judith K. & McInerney, Melissa & Neumark, David, 2008. "Measuring the Importance of Labor Market Networks," IZA Discussion Papers 3750, Institute for the Study of Labor (IZA).
  18. 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.
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Cited by:
  1. Christian Dustmann & Albrecht Glitz & Uta Schönberg, 2011. "Referral-based Job Search Networks," CReAM Discussion Paper Series 1114, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  2. repec:ese:iserwp:2011-21 is not listed on IDEAS
  3. Patacchini, Eleonora & Zenou, Yves, 2012. "Ethnic networks and employment outcomes," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 938-949.
  4. Lorenzo Cappellari & Konstantinos Tatsiramos, 2011. "Friends’ Networks and Job Finding Rates," Discussion Papers in Economics 11/40, Department of Economics, University of Leicester.
  5. 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.
  6. Arceo-Gómez, Eva Olimpia, 2012. "Job Search, Networks, and Labor Market Performance of Immigrants," MPRA Paper 44533, University Library of Munich, Germany.
  7. Isabelle Chort, 2013. "Migrant network and immigrants’ occupational mismatch," Working Papers DT/2013/04, DIAL (Développement, Institutions et Mondialisation).
  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. 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.
  10. 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.

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