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Immigrants’ Social Capital and Labor Market Performance: The Effect of Social Ties on Earnings and Occupational Prestige

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  • Mesay A. Tegegne

Abstract

type="main"> While a growing body of literature investigates the role of social capital in the labor market outcomes of immigrants, the verdict is still out on whether or not reliance on social networks enhances or constrains labor market performance. This study explores the effect of relying on social ties to find a job on the hourly earnings and occupational prestige of new legal immigrants in the United States. Utilizing data from the New Immigrant Survey 2003 cohort, the effect on occupational outcomes of relying on social ties to locate a job is estimated using both ordinary least squares (OLS) regression and propensity score matching (PSM), to minimize observable selection bias. Propensity score matching is used to identify the treatment effect of using social contacts by comparing the outcomes of closely matched treatment and control groups. Both OLS and PSM estimates indicate that using a close contact to find a job has a detrimental effect on earnings and occupational prestige. The effect of social capital, however, varies across groups. Particularly, while social capital has little or no effect on the labor market outcomes of black and Hispanic immigrants, it has a detrimental effect on the occupational prestige of Asian and white immigrants (the effect being stronger for Asians than for whites). Social capital research on immigrants’ outcomes should, therefore, take caution in generalizing from group-specific research, as these findings point to contextual labor market effects of social capital.

Suggested Citation

  • Mesay A. Tegegne, 2015. "Immigrants’ Social Capital and Labor Market Performance: The Effect of Social Ties on Earnings and Occupational Prestige," Social Science Quarterly, Southwestern Social Science Association, vol. 96(5), pages 1396-1410, November.
    • Handle: RePEc:bla:socsci:v:96:y:2015:i:5:p:1396-1410
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    References listed on IDEAS

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    1. Friedberg, Rachel M, 2000. "You Can't Take It with You? Immigrant Assimilation and the Portability of Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 221-251, April.
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    4. Ilana Redstone Akresh, 2008. "Occupational Trajectories of Legal US Immigrants: Downgrading and Recovery," Population and Development Review, The Population Council, Inc., vol. 34(3), pages 435-456, September.
    5. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
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    2. Wenbin Wang & Yang Cao, 2022. "Network Diversity and Health Change among International Migrants in China: Evidence from Foreigners in Changchun," IJERPH, MDPI, vol. 19(23), pages 1-16, December.

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