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Party On: The Labor Market Returns to Social Networks in Adolescence

Author

Listed:
  • Adriana Lleras-Muney
  • Matthew Miller
  • Shuyang Sheng
  • Veronica Sovero

Abstract

We investigate the returns to adolescent friendships on earnings in adulthood using data from the National Longitudinal Study of Adolescent to Adult Health. Because both education and friendships are jointly determined in adolescence, ordinary least squares estimates of their returns are likely biased. We implement a novel procedure to obtain bounds on the causal returns to friendships: we assume that the returns to schooling range from 5% to 15% (on the basis of prior literature) and instrument for friendships using similarity in age among peers. Having one more friend in adolescence increases earnings between 7% and 14%, substantially more than ordinary least squares estimates would suggest.

Suggested Citation

  • Adriana Lleras-Muney & Matthew Miller & Shuyang Sheng & Veronica Sovero, 2026. "Party On: The Labor Market Returns to Social Networks in Adolescence," Journal of Labor Economics, University of Chicago Press, vol. 44(1), pages 25-52.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/731308
    DOI: 10.1086/731308
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