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Labor Market Networks and Recovery from Mass Layoffs Before, During, and After the Great Recession

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  • Judith K. Hellerstein
  • Mark J. Kutzbach
  • David Neumark

Abstract

We test the effects of labor market networks defined by residential neighborhoods on re-employment following mass layoffs. We develop two measures of labor market network strength. One captures the flows of information to job seekers about the availability of job vacancies at employers of workers in the network, and the other captures referrals provided to employers by other network members. These network measures are linked to more rapid re-employment following mass layoffs, and to re-employment at neighbors’ employers. We also find evidence that network connections – especially those that provide information about job vacancies – became less productive during the Great Recession.

Suggested Citation

  • Judith K. Hellerstein & Mark J. Kutzbach & David Neumark, 2015. "Labor Market Networks and Recovery from Mass Layoffs Before, During, and After the Great Recession," Working Papers 15-14, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:15-14
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    References listed on IDEAS

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    Cited by:

    1. Jahn, Elke & Neugart, Michael, 2020. "Do neighbors help finding a job? Social networks and labor market outcomes after plant closures," Labour Economics, Elsevier, vol. 65(C).
    2. Marcelo Arbex & Dennis O'Dea & David Wiczer, 2019. "Network Search: Climbing The Job Ladder Faster," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(2), pages 693-720, May.
    3. Lena Hensvi & Dagmar Müller & Oskar Nordström Skans, 2023. "Connecting the Young: High School Graduates’ Matching to First Jobs in Booms and Great Recessions," The Economic Journal, Royal Economic Society, vol. 133(652), pages 1466-1509.
    4. Jahn, Elke Jutta & Neugart, Michael, 2016. "Do neighbors help finding a job? Social networks and labor market," VfS Annual Conference 2016 (Augsburg): Demographic Change 145476, Verein für Socialpolitik / German Economic Association.
    5. William J. Carrington & Bruce Fallick, 2017. "Why Do Earnings Fall with Job Displacement?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(4), pages 688-722, October.
    6. Meekes, Jordy & Hassink, Wolter, 2017. "The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy," IZA Discussion Papers 10894, Institute of Labor Economics (IZA).
    7. Perihan Ozge Saygin & Andrea Weber & Michèle A. Weynandt, 2021. "Coworkers, Networks, and Job-Search Outcomes among Displaced Workers," ILR Review, Cornell University, ILR School, vol. 74(1), pages 95-130, January.
    8. Meekes, Jordy & Hassink, Wolter H.J., 2019. "The role of the housing market in workers′ resilience to job displacement after firm bankruptcy," Journal of Urban Economics, Elsevier, vol. 109(C), pages 41-65.
    9. J. Meekes & W.H.J. Hassink, 2016. "The role of the housing market in workers’ resilience to job displacement after firm bankruptcy," Working Papers 16-10, Utrecht School of Economics.

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    More about this item

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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