When Strong Ties are Strong: Networks and Youth Labor Market Entry
The conditions under which young workers find their first real post-graduation jobs are both very important for the young’ future careers and insufficiently documented given their potential importance for young workers welfare. To study these conditions, and in particular the role played by social ties, we use a Swedish population-wide linked employer-employee data set of graduates from all levels of schooling which includes detailed information on family ties, neighborhoods, schools, class composition, and parents’ and children’ employers over a period covering years with both high and low unemployment, together with measures of firm performance. We find that strong social ties (parents) are an important determinant for where young workers find their first job. The effects are larger if the graduate’s position is “weak” (low education, bad grades), during high unemployment years, and when information on potential openings are likely to be scarce. On the hiring side, by contrast, the effects are larger if the parent’s position is “strong” (long tenure, high wage) and if the parent’s plant is more productive. The youths appear to benefit from the use of strong social ties through faster access to jobs and by better labor market outcomes as measured a few years after entry. In particular, workers finding their entry jobs through strong social ties are considerably more likely to remain in this job, while experiencing better wage growth than other entrants in the same plant. Firms also appear to benefit from these wage costs (relative to comparable entrants) starting at a lower base. They also benefit on the parents’ side; parents’ wage growth drops dramatically exactly at the entry of one of their children in the plant, although this is a moment when firm profits tend to be growing. Indeed, the firm-side benefits appear large enough for (at least small) firms to increase job creation at the entry level in years when a child of one of their employees graduates.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Sep 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jonathan Conning, 2000. "Monitoring by Peers or by Delegates? Joint Liability Loans under Moral Hazard," Department of Economics Working Papers 2000-07, Department of Economics, Williams College.
- Keane, Michael P & Wolpin, Kenneth I, 1997.
"The Career Decisions of Young Men,"
Journal of Political Economy,
University of Chicago Press, vol. 105(3), pages 473-522, June.
- Topa, Giorgio, 1997.
"Social Interactions, Local Spillovers and Unemployment,"
97-17, C.V. Starr Center for Applied Economics, New York University.
- Topa, Giorgio, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 68(2), pages 261-95, April.
- Cappellari, Lorenzo & Tatsiramos, Konstantinos, 2010.
"Friends' Networks and Job Finding Rates,"
IZA Discussion Papers
5240, Institute for the Study of Labor (IZA).
- Lorenzo Cappellari & Konstantinos Tatsiramos, 2010. "Friends’ Networks and Job Finding Rates," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0059, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
- Lorenzo Cappellari & Konstantinos Tatsiramos, 2011. "Friends’ Networks and Job Finding Rates," Discussion Papers in Economics 11/40, Department of Economics, University of Leicester.
- Lorenzo Cappellari & Konstantinos Tatsiramos, 2010. "Friends' Networks and Job Finding Rates," CESifo Working Paper Series 3243, CESifo Group Munich.
- Aslund, Olof & Hensvik, Lena & Nordström Skans, Oskar, 2009.
"Seeking Similarity: How Immigrants and Natives Manage at the Labor Market,"
IZA Discussion Papers
4640, Institute for the Study of Labor (IZA).
- Olof �slund & Lena Hensvik & Oskar Nordstr�m Skans, 2014. "Seeking Similarity: How Immigrants and Natives Manage in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 32(3), pages 405 - 441.
- Åslund, Olof & Hensvik, Lena & Nordström Skans, Oskar, 2009. "Seeking similarity: how immigrants and natives manage at the labor market," Working Paper Series 2009:24, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Olof Aslund & Lena Hensvik & Oskar Nordstrom Skans, 2009. "Seeking similarity: How immigrants and natives manage at the labor market," CReAM Discussion Paper Series 0932, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
- Cingano, Federico & Rosolia, Alfonso, 2008.
"People I Know: Job Search and Social Networks,"
CEPR Discussion Papers
6818, C.E.P.R. Discussion Papers.
- Ghatak, Maitreesh & Guinnane, Timothy W., 1999.
"The economics of lending with joint liability: theory and practice,"
Journal of Development Economics,
Elsevier, vol. 60(1), pages 195-228, October.
- Maitreesh Ghatak & Timothy W. Guinnane, 1998. "The Economics of Lending with Joint Liability: Theory and Practice," Discussion Papers 98-16, University of Copenhagen. Department of Economics.
- Ghatak, M. & Guinnane, T.W., 1998. "The Economics of Lending with Joint Liability: Theory and Practice," Papers 791, Yale - Economic Growth Center.
- Corak, Miles & Piraino, Patrizio, 2010. "Intergenerational Earnings Mobility and the Inheritance of Employers," IZA Discussion Papers 4876, Institute for the Study of Labor (IZA).
- Giacomo Pasini & Giovanni Millo, 2006.
"Does Social Capital reduce moral hazard? A network model for non-life insurance demand,"
2006_59, Department of Economics, University of Venice "Ca' Foscari".
- Giovanni Millo & Giacomo Pasini, 2010. "Does Social Capital Reduce Moral Hazard? A Network Model for Non-Life Insurance Demand," Fiscal Studies, Institute for Fiscal Studies, vol. 31(3), pages 341-372, 09.
- Olof Aslund & Oskar Nordström Skans, 2010.
"Will I See You at Work? Ethnic Workplace Segregation in Sweden, 1985-2002,"
Industrial and Labor Relations Review,
ILR Review, Cornell University, ILR School, vol. 63(3), pages 471-493, April.
- Åslund, Olof & Nordström Skans, Oskar, 2005. "Will I see you at work? Ethnic workplace segregation in Sweden 1985–2002," Working Paper Series 2005:24, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- 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.
- 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.
- Kahn, Lisa B., 2010. "The long-term labor market consequences of graduating from college in a bad economy," Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:9620. 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: ()
If references are entirely missing, you can add them using this form.