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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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File URL: ftp://ftp2.census.gov/ces/wp/2009/CES-WP-09-01.pdf
File Function: First version, 2009
Download Restriction: no

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, 2007. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," Working Papers 07-02, Center for Economic Studies, U.S. Census Bureau.
  2. 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.
  3. Antoni Calvó-Armengol & Matthew O. Jackson, 2003. "Networks in Labor Markets: Wage and Employment Dynamics and Inequality," Working Papers 55, Barcelona Graduate School of Economics.
  4. Ian M. Schmutte, 2015. "Job Referral Networks and the Determination of Earnings in Local Labor Markets," Journal of Labor Economics, University of Chicago Press, vol. 33(1), pages 1 - 32.
  5. 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.
  6. 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.
  7. 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.
  8. Patrick Bayer & Hanming Fang & Robert McMillan, 2011. "Separate When Equal? Racial Inequality and Residential Segregation," Working Papers 11-09, Duke University, Department of Economics.
  9. S. Illeris & G. Akehurst, 2001. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 21(1), pages 1-4, January.
  10. Judith HELLERSTEIN & David NEUMARK, 2003. "Ethnicity, Language, and Workplace Segregation: Evidence from a New Matched Employer-Employee Data Set," Annales d'Economie et de Statistique, ENSAE, issue 71-72, pages 19-78.
  11. Patrick Bayer & Stephen L. Ross, 2004. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Econometric Society 2004 North American Summer Meetings 495, Econometric Society.
  12. 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.
  13. Judith Hellerstein & David Neumark & Melissa McInerney, 2007. "Spatial Mismatch or Racial Mismatch?," Working Papers 07-16, Center for Economic Studies, U.S. Census Bureau.
  14. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883, June.
  15. 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.
  16. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
  17. Patel, Krishna & Vella, Francis, 2007. "Immigrant Networks and Their Implications for Occupational Choice and Wages," IZA Discussion Papers 3217, Institute for the Study of Labor (IZA).
  18. 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..
  19. Federico Cingano & Alfonso Rosolia, 2012. "People I Know: Job Search and Social Networks," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 291 - 332.
  20. Edin, P.-A. & Fredriksson, P. & Aslund, O., 2000. "Evidence from a Natural Experiment," Papers 2000-21, Uppsala - Working Paper Series.
  21. 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.
  22. 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.
  23. 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.
  24. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 927, Economic Growth Center, Yale University.
  25. 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.
  26. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
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