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Neighbors and Co-Workers: The Importance of Residential Labor Market Networks

  • Judith Hellerstein
  • Melissa McInerney
  • David Neumark

We specify and implement a test for the importance of network effects in determining the establishments at which people work, using recently-constructed matched employer-employee data at the establishment level. We explicitly measure the importance of network effects for groups broken out by race, ethnicity, and various measures of skill, for networks generated by residential proximity. The evidence indicates that labor market networks play an important role in hiring, more so for minorities and the less-skilled, especially among Hispanics, and that labor market networks appear to be race-based.

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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 09-01.

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Length: 47 pages
Date of creation: Jan 2009
Date of revision:
Handle: RePEc:cen:wpaper:09-01
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  1. Judith Hellerstein & David Neumark, 2006. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," Working Papers 060710, University of California-Irvine, Department of Economics.
  2. Susan Clampet-Lundquist & J. Greg Duncan & Kathryn Edin & Jeffrey R. Kling & Kristin Turney, 2006. "Neighborhood Effects on Barriers to Employment: Results From a Randomized Housing Mobility Experiment in Baltimore," Working Papers 890, Princeton University, Department of Economics, Industrial Relations Section..
  3. Edin, Per-Anders & Fredriksson, Peter & Åslund, Olof, 2000. "Ethnic enclaves and the economic success of immigrants - evidence from a natural experiment," Working Paper Series 2000:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  4. Ian M. Schmutte, 2011. "Job Referral Networks and the Determination of Earnings in Local Labor Markets," 2011 Meeting Papers 536, Society for Economic Dynamics.
  5. Hellerstein, Judith K. & Neumark, David & McInerney, Melissa, 2008. "Spatial mismatch or racial mismatch?," Journal of Urban Economics, Elsevier, vol. 64(2), pages 464-479, September.
  6. Giorgio Topa & Stephen Ross & Patrick Bayer, 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 05-23, Center for Economic Studies, U.S. Census Bureau.
  7. Krishna Patel & Francis Vella, 2013. "Immigrant Networks and Their Implications for Occupational Choice and Wages," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1249-1277, October.
  8. S. Illeris & G. Akehurst, 2001. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 21(1), pages 1-4, January.
  9. Cutler, David M & Glaeser, Edward L, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 827-72, August.
  10. Edward P. Lazear & Paul Oyer, 2007. "Personnel Economics," NBER Working Papers 13480, National Bureau of Economic Research, Inc.
  11. Judith K. Hellerstein & David Neumark, 2002. "Ethnicity, Language, and Workplace Segregation: Evidence from a New Matched Employer-Employee Data Set," NBER Working Papers 9037, National Bureau of Economic Research, Inc.
  12. 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.
  13. Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University 0217, Department of Economics, Tufts University.
  14. Ellison, G. & Glaeser, E.L., 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Working papers 94-27, Massachusetts Institute of Technology (MIT), Department of Economics.
  15. Cingano, Federico & Rosolia, Alfonso, 2008. "People I Know: Job Search and Social Networks," CEPR Discussion Papers 6818, C.E.P.R. Discussion Papers.
  16. Patrick Bayer & Hanming Fang & Robert McMillan, 2005. "Separate When Equal? Racial Inequality and Residential Segregation," NBER Working Papers 11507, National Bureau of Economic Research, Inc.
  17. Walter S. McManus, 1990. "Labor Market Effects of Language Enclaves: Hispanic Men in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 25(2), pages 228-252.
  18. Antoni Calvó-Armengol & Matthew O. Jackson, 2015. "Networks in Labor Markets: Wage and Employment Dynamics and Inequality," Working Papers 55, Barcelona Graduate School of Economics.
  19. H. J. Holzer, . "Why do small establishments hire fewer blacks than large ones," Institute for Research on Poverty Discussion Papers 1119-97, University of Wisconsin Institute for Research on Poverty.
  20. Kaivan Munshi, 2003. "Networks In The Modern Economy: Mexican Migrants In The U.S. Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(2), pages 549-599, May.
  21. Edin, P.-A. & Fredriksson, P. & Aslund, O., 2000. "Evidence from a Natural Experiment," Papers 2000-21, Uppsala - Working Paper Series.
  22. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
  23. Harry J. Holzer, 1998. "Why Do Small Establishments Hire Fewer Blacks Than Large Ones?," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 896-914.
  24. Simon, Curtis J & Warner, John T, 1992. "Matchmaker, Matchmaker: The Effect of Old Boy Networks on Job Match Quality, Earnings, and Tenure," Journal of Labor Economics, University of Chicago Press, vol. 10(3), pages 306-30, July.
  25. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
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