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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. 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.
  2. 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.
  3. Marmaros, David & Sacerdote, Bruce, 2002. "Peer and social networks in job search," European Economic Review, Elsevier, Elsevier, vol. 46(4-5), pages 870-879, May.
  4. Bentolila, Samuel & Michelacci, Claudio & Suarez, Javier, 2004. "Social Contacts and Occupational Choice," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4308, C.E.P.R. Discussion Papers.
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  7. Åslund, Olof & Edin, Per-Anders & Fredriksson, Peter, 2001. "Ethnic Enclaves and the Economic Success of Immigrants - Evidence from a Natural Experiment," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2729, C.E.P.R. Discussion Papers.
  8. Kugler, Adriana, 2002. "Employee Referrals and Efficiency Wages," IZA Discussion Papers 633, Institute for the Study of Labor (IZA).
  9. 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).
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  12. Michele Pellizzari, 2004. "Do Friends and Relatives Really Help in Getting a Good Job?," CEP Discussion Papers dp0623, Centre for Economic Performance, LSE.
  13. Zenou,Yves, 2009. "Urban Labor Economics," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521698221.
  14. Glaeser, Edward L & Sacerdote, Bruce & Scheinkman, Jose A, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 111(2), pages 507-48, May.
  15. Christian Dustmann & Albrecht Glitz & Uta Schoenberg, 2011. "Referral-based Job Search Networks," Norface Discussion Paper Series, Norface Research Programme on Migration, Department of Economics, University College London 2011012, Norface Research Programme on Migration, Department of Economics, University College London.
  16. 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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Citations

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Cited by:
  1. Lorenzo Cappellari & Konstantinos Tatsiramos, 2010. "Friends' Networks and Job Finding Rates," CESifo Working Paper Series 3243, CESifo Group Munich.
  2. Patacchini, Eleonora & Zenou, Yves, 2008. "Ethnic Networks and Employment Outcomes," IZA Discussion Papers 3331, Institute for the Study of Labor (IZA).
  3. Dustmann, Christian & Glitz, Albrecht & Schönberg, Uta, 2011. "Referral-based Job Search Networks," IZA Discussion Papers 5777, Institute for the Study of Labor (IZA).
  4. Arceo-Gómez, Eva Olimpia, 2012. "Job Search, Networks, and Labor Market Performance of Immigrants," MPRA Paper 44533, University Library of Munich, Germany.
  5. Isabelle Chort, 2013. "Migrant network and immigrants’ occupational mismatch," Working Papers, DIAL (Développement, Institutions et Mondialisation) DT/2013/04, DIAL (Développement, Institutions et Mondialisation).
  6. 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.
  7. Nicodemo, Catia & Nicolini, Rosella, 2012. "Random or Referral Hiring: When Social Connections Matter," IZA Discussion Papers 6312, Institute for the Study of Labor (IZA).
  8. Tommaso Colussi, 2013. "Migrant Networks and Job Search Outcomes: Evidence from Displaced Workers," Working Papers, Queen Mary, University of London, School of Economics and Finance 706, Queen Mary, University of London, School of Economics and Finance.
  9. Cappellari, Lorenzo & Tatsiramos, Konstantinos, 2011. "Friends’ networks and job finding rates," ISER Working Paper Series 2011-21, Institute for Social and Economic Research.
  10. 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, University of Western Ontario, CIBC Centre for Human Capital and Productivity 20136, University of Western Ontario, CIBC Centre for Human Capital and Productivity.

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