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Do Parental Networks Pay Off? Linking Children's Labor†Market Outcomes to Their Parents' Friends

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  • Erik Plug
  • Bas van der Klaauw
  • Lennart Ziegler

Abstract

In this paper, we examine whether children are better off if their parents have more elaborate social networks. Using data on high†school friendships of parents, we analyze whether the number and characteristics of friends affect the labor†market outcomes of children. While parental friendships formed in high school appear long lasting, we find no significant impact on their children's occupational choices and earnings prospects. These results do not change when we account for network endogeneity, network persistency, and network measurement error. Only when children enter the labor market do friends of parents have a marginally significant but small influence on their occupational choice.

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  • Erik Plug & Bas van der Klaauw & Lennart Ziegler, 2018. "Do Parental Networks Pay Off? Linking Children's Labor†Market Outcomes to Their Parents' Friends," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(1), pages 268-295, January.
  • Handle: RePEc:bla:scandj:v:120:y:2018:i:1:p:268-295
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    File URL: https://doi.org/10.1111/sjoe.12227
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