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University peers and career prospects: The impact of university ties on early labor market outcomes

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  • Ilyés, Virág
  • Sebők, Anna

Abstract

By using extensive Hungarian administrative data, this study aims to provide empirical evidence that former university ties strongly influence the labour market outcomes of individuals, even early in their careers. The estimates focus on the early career paths of graduates who obtained a master's degree between 2010 and 2017. As direct information on social contacts is not available in the dataset, we proxy university peers as students who started and finished the same university programmes (bachelor's or master's) in the same semester. Our results suggest that individuals are more likely to get hired by given firms if their former peers work there. The measured effects are considered significant and quite robust, even after controlling for the important sources of potential bias. Although we cannot present exact proof of the direct help of contacts, we provide suggestive evidence that seems to confirm the existence of such assistance. Our findings also revealed that the measured benefits are mainly attributable to connections from bachelor's studies. The effect of master's peers is mostly driven by the selection of individuals alongside prevalent study track-firm pathways. By comparing entries into new firms with and without peers, we also show that graduates with links have better labor market outcomes after hiring: they earn higher wages, obtain better and more prestigious positions, and stay longer at their new firm. The results draw attention to the importance of university peers in the labour market and contribute to the discussions about the determinants of early labour market success.

Suggested Citation

  • Ilyés, Virág & Sebők, Anna, 2023. "University peers and career prospects: The impact of university ties on early labor market outcomes," Economics of Education Review, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:ecoedu:v:96:y:2023:i:c:s0272775723001036
    DOI: 10.1016/j.econedurev.2023.102456
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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