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Social Networks and Labor Market Outcomes: Occupation Matters

Author

Listed:
  • Giovanna d’Adda
  • Jessica Gagete Miranda
  • Giovanni Righetto

Abstract

We study how the influence of social networks on individual labor market outcomes varies across occupations, specifically between manual and cognitive jobs. Using data from over fourteen million Brazilian workers and exploiting exogenous job termination due to mass layoffs, we confirm that social networks reduce unemployment duration and increase wages in the new job, but show that these effects are heterogeneous depending on workers’ occupations at the time of displacement. Manual workers benefit more from networks in terms of job reentry but less in terms of wages compared to workers performing cognitive tasks. We argue that these different patterns are due to the fact that networks reduce the likelihood that manual workers find new jobs in the same occupation, given that occupational change is associated with reductions in wages.

Suggested Citation

  • Giovanna d’Adda & Jessica Gagete Miranda & Giovanni Righetto, 2025. "Social Networks and Labor Market Outcomes: Occupation Matters," FBK-IRVAPP Working Papers 2025-02, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
    • Handle: RePEc:fbk:wpaper:2025-02
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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