IDEAS home Printed from https://ideas.repec.org/a/ucp/jpolec/v116y2008i6p1150-1196.html
   My bibliography  Save this article

Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes

Author

Listed:
  • Patrick Bayer
  • Stephen L. Ross
  • Giorgio Topa

Abstract

We use a novel research design to empirically detect the effect of social interactions on labor market outcomes. Using Census data on residential and employment locations, we examine whether individuals residing in the same city block are more likely to work together than those in nearby blocks. We find evidence of significant social interactions. The estimated referral effect is stronger when individuals are similar in sociodemographic characteristics. These findings are robust across specifications intended to address sorting and reverse causation. Further, the increased availability of neighborhood referrals has a significant impact on a wide range of labor market outcomes. (c) 2008 by The University of Chicago. All rights reserved.

Suggested Citation

  • Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2008. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1150-1196, December.
  • Handle: RePEc:ucp:jpolec:v:116:y:2008:i:6:p:1150-1196
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/595975
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brian A. Jacob, 2004. "Public Housing, Housing Vouchers, and Student Achievement: Evidence from Public Housing Demolitions in Chicago," American Economic Review, American Economic Association, vol. 94(1), pages 233-258, March.
    2. Jeffrey S. Zax & Daniel I. Rees, 2002. "IQ, Academic Performance, Environment, and Earnings," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 600-616, November.
    3. Edward L. Glaeser & Bruce Sacerdote & José A. Scheinkman, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 507-548.
    4. Weinberg, Bruce A., 2004. "Testing the spatial mismatch hypothesis using inter-city variations in industrial composition," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 505-532, September.
    5. Brock, William A. & Durlauf, Steven N., 2001. "Interactions-based models," Handbook of Econometrics,in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 54, pages 3297-3380 Elsevier.
    6. David J. Zimmerman, 2003. "Peer Effects in Academic Outcomes: Evidence from a Natural Experiment," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 9-23, February.
    7. Card, David & Rothstein, Jesse, 2007. "Racial segregation and the black-white test score gap," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2158-2184, December.
    8. Mary A. Burke & Gary M. Fournier & Kislaya Prasad, 2007. "The Diffusion of a Medical Innovation: Is Success in the Stars?," Southern Economic Journal, Southern Economic Association, vol. 73(3), pages 588-603, January.
    9. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-452, June.
    10. Jens Ludwig & Greg J. Duncan & Paul Hirschfield, 2001. "Urban Poverty and Juvenile Crime: Evidence from a Randomized Housing-Mobility Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 655-679.
    11. Oriana Bandiera & Imran Rasul, 2006. "Social Networks and Technology Adoption in Northern Mozambique," Economic Journal, Royal Economic Society, vol. 116(514), pages 869-902, October.
    12. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-1418, December.
    13. Marmaros, David & Sacerdote, Bruce, 2002. "Peer and social networks in job search," European Economic Review, Elsevier, vol. 46(4-5), pages 870-879, May.
    14. Holzer, Harry J, 1988. "Search Method Use by Unemployed Youth," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 1-20, January.
    15. Jackson, Matthew O. & Calvo, Antoni, 2002. "Social Networks in Determing Employment and Wages: Patterns, Dynamics, and Inequality," Working Papers 1149, California Institute of Technology, Division of the Humanities and Social Sciences.
    16. Patrick Bayer & Randi Hjalmarsson & David Pozen, 2009. "Building Criminal Capital behind Bars: Peer Effects in Juvenile Corrections," The Quarterly Journal of Economics, Oxford University Press, vol. 124(1), pages 105-147.
    17. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 531-542.
    18. Ross, Stephen L., 1998. "Racial Differences in Residential and Job Mobility: Evidence Concerning the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 43(1), pages 112-135, January.
    19. Edward L. Glaeser & Bruce I. Sacerdote & Jose A. Scheinkman, 2003. "The Social Multiplier," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 345-353, 04/05.
    20. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366.
    21. John T. Addison & Pedro Portugal, 1998. "Job Search Methods and Outcomes," Working Papers w199808, Banco de Portugal, Economics and Research Department.
    22. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    23. Katherine M. O'Regan & John M. Quigley, 1996. "Teenage Employment and the Spatial Isolation of Minority and Poverty Households," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 692-702.
    24. Daniel Aaronson, 1998. "Using Sibling Data to Estimate the Impact of Neighborhoods on Children's Educational Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 915-946.
    25. Bruce Sacerdote, 2001. "Peer Effects with Random Assignment: Results for Dartmouth Roommates," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 681-704.
    26. Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
    27. Caroline Hoxby, 2000. "Peer Effects in the Classroom: Learning from Gender and Race Variation," NBER Working Papers 7867, National Bureau of Economic Research, Inc.
    28. Ihlanfeldt, Keith R & Sjoquist, David L, 1990. "Job Accessibility and Racial Differences in Youth Employment Rates," American Economic Review, American Economic Association, vol. 80(1), pages 267-276, March.
    29. repec:pri:cepsud:109rothstein is not listed on IDEAS
    30. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2001. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 607-654.
    31. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    32. Philip Oreopoulos, 2003. "The Long-Run Consequences of Living in a Poor Neighborhood," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1533-1575.
    33. Flachaire, Emmanuel, 1999. "A better way to bootstrap pairs," Economics Letters, Elsevier, vol. 64(3), pages 257-262, September.
    34. Antoni Calvó-Armengol & Matthew O. Jackson, 2004. "The Effects of Social Networks on Employment and Inequality," American Economic Review, American Economic Association, vol. 94(3), pages 426-454, June.
    35. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-655, June.
    36. David Card & Jesse Rothstein, 2005. "Racial Segregation and the Black-White Test Score Gap," Working Papers 879, Princeton University, Department of Economics, Industrial Relations Section..
    37. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 1019-1055.
    38. Wahba, Jackline & Zenou, Yves, 2005. "Density, social networks and job search methods: Theory and application to Egypt," Journal of Development Economics, Elsevier, vol. 78(2), pages 443-473, December.
    39. John T. Addison & Pedro Portugal, 2002. "Job search methods and outcomes," Oxford Economic Papers, Oxford University Press, vol. 54(3), pages 505-533, July.
    40. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
    41. Ignacio Palacios-Huerta, 2003. "Learning to Open Monty Hall's Doors," Experimental Economics, Springer;Economic Science Association, vol. 6(3), pages 235-251, November.
    42. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 815-842.
    43. Susan J. Popkin & James E. Rosenbaum & Patricia M. Meaden, 1993. "Labor market experiences of low-income black women in middle-class suburbs: Evidence from a survey of gautreaux program participants," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(3), pages 556-573.
    44. David M. Cutler & Edward L. Glaeser, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 827-872.
    45. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    46. Anne C. Case & Lawrence F. Katz, 1991. "The Company You Keep: The Effects of Family and Neighborhood on Disadvantaged Youths," NBER Working Papers 3705, National Bureau of Economic Research, Inc.
    47. Evans, William N & Oates, Wallace E & Schwab, Robert M, 1992. "Measuring Peer Group Effects: A Study of Teenage Behavior," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 966-991, October.
    48. Aizer, Anna & Currie, Janet, 2004. "Networks or neighborhoods? Correlations in the use of publicly-funded maternity care in California," Journal of Public Economics, Elsevier, vol. 88(12), pages 2573-2585, December.
    49. Flachaire, Emmanuel, 2005. "Bootstrapping heteroskedastic regression models: wild bootstrap vs. pairs bootstrap," Computational Statistics & Data Analysis, Elsevier, vol. 49(2), pages 361-376, April.
    50. Weinberg, Bruce A., 2000. "Black Residential Centralization and the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 48(1), pages 110-134, July.
    51. Linda Datcher Loury, 2004. "Some Job Contacts are More Equal Than Others: Earnings and Job Information Networks," Discussion Papers Series, Department of Economics, Tufts University 0404, Department of Economics, Tufts University.
    52. Giorgio Topa, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 261-295.
    53. Bruce A. Weinberg & Patricia B. Reagan & Jeffrey J. Yankow, 2004. "Do Neighborhoods Affect Hours Worked? Evidence from Longitudinal Data," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 891-924, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • J0 - Labor and Demographic Economics - - General

    Lists

    This item is featured on the following reading lists or Wikipedia pages:
    1. Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes (JPE 2008) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jpolec:v:116:y:2008:i:6:p:1150-1196. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division). General contact details of provider: http://www.journals.uchicago.edu/JPE/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.