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

  • Judith K. Hellerstein
  • Melissa McInerney
  • David Neumark

We specify and implement a test for the presence and importance of labor market network based on residential proximity in determining the establishments at which people work. Using matched employer-employee data at the establishment level, we measure the importance of these network effects for groups broken out by race, ethnicity, and various measures of skill. The evidence indicates that these types of labor market networks do exist and play an important role in determining the establishments where workers work, that they are more important for minorities and the less-skilled, especially among Hispanics, and that these networks appear to be race-based.

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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd09-132.

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Date of creation: Mar 2010
Date of revision:
Handle: RePEc:hst:ghsdps:gd09-132
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  1. 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.
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  4. Patrick Bayer & Hanming Fang & Robert McMillan, 2011. "Separate When Equal? Racial Inequality and Residential Segregation," Working Papers 11-09, Duke University, Department of Economics.
  5. 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.
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  7. 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.
  8. S. Illeris & G. Akehurst, 2001. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 21(1), pages 1-4, January.
  9. 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.
  10. Calvo-Armengol, Antoni & Jackson, Matthew O., 2007. "Networks in labor markets: Wage and employment dynamics and inequality," Journal of Economic Theory, Elsevier, vol. 132(1), pages 27-46, January.
  11. 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.
  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. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
  14. Åslund, Olof & Edin, Per-Anders & Fredriksson, Peter, 2001. "Ethnic Enclaves and the Economic Success of Immigrants - Evidence from a Natural Experiment," CEPR Discussion Papers 2729, C.E.P.R. Discussion Papers.
  15. Edin, P.-A. & Fredriksson, P. & Aslund, O., 2000. "Evidence from a Natural Experiment," Papers 2000-21, Uppsala - Working Paper Series.
  16. 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.
  17. Judith K. Hellerstein & David Neumark & Melissa McInerney, 2007. "Spatial Mismatch or Racial Mismatch?," NBER Working Papers 13161, National Bureau of Economic Research, Inc.
  18. 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.
  19. Edward P. Lazear & Paul Oyer, 2007. "Personnel Economics," NBER Working Papers 13480, National Bureau of Economic Research, Inc.
  20. 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.
  21. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
  22. 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.
  23. 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..
  24. 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.
  25. 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.
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