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Measuring the Importance of Labor Market Networks

Author

Listed:
  • Hellerstein, Judith K.

    (University of Maryland)

  • McInerney, Melissa

    (College of William and Mary)

  • Neumark, David

    (University of California, Irvine)

Abstract

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.

Suggested Citation

  • Hellerstein, Judith K. & McInerney, Melissa & Neumark, David, 2008. "Measuring the Importance of Labor Market Networks," IZA Discussion Papers 3750, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3750
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    Cited by:

    1. Christian Dustmann & Albrecht Glitz & Uta Schönberg & Herbert Brücker, 2016. "Referral-based Job Search Networks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(2), pages 514-546.
    2. Deepti Goel & Kevin Lang, 2019. "Social Ties and the Job Search of Recent Immigrants," ILR Review, Cornell University, ILR School, vol. 72(2), pages 355-381, March.
    3. Fredrik Andersson & Mónica García-Pérez & John Haltiwanger & Kristin McCue & Seth Sanders, 2014. "Workplace Concentration of Immigrants," Demography, Springer;Population Association of America (PAA), vol. 51(6), pages 2281-2306, December.
    4. Badi H. Baltagi & Ying Deng & Xiangjun Ma, 2018. "Network effects on labor contracts of internal migrants in China: a spatial autoregressive model," Empirical Economics, Springer, vol. 55(1), pages 265-296, August.
    5. Delia Furtado & Nikolaos Theodoropoulos, 2009. "Intermarriage and Immigrant Employment: The Role of Networks," University of Cyprus Working Papers in Economics 3-2009, University of Cyprus Department of Economics.
    6. Jeanne Lafortune & José Tessada, 2012. "Smooth(er) Landing? The Dynamic Role of Networks in the Location and Occupational Choice of Immigrants," Working Papers ClioLab 14, EH Clio Lab. Instituto de Economía. Pontificia Universidad Católica de Chile.
    7. 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.
    8. Meta Brown & Elizabeth Setren & Giorgio Topa, 2016. "Do Informal Referrals Lead to Better Matches? Evidence from a Firm's Employee Referral System," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 161-209.
    9. Eva Arceo, 2010. "Job Search, Social Interactions and Labor Market Performance of Low-Skilled Immigrants," Working papers DTE 489, CIDE, División de Economía.
    10. Ulf Nielsson & Herdis Steingrimsdottir, 2018. "The signalling value of education across genders," Empirical Economics, Springer, vol. 54(4), pages 1827-1854, June.
    11. Lorenzo Cappellari & Konstantinos Tatsiramos, 2010. "Friends' Networks and Job Finding Rates," CESifo Working Paper Series 3243, CESifo.
    12. Cassar, Alessandra & Rigdon, Mary, 2011. "Trust and trustworthiness in networked exchange," Games and Economic Behavior, Elsevier, vol. 71(2), pages 282-303, March.
    13. Tatsiramos, Konstantinos & Cappellari, Lorenzo, 2011. "Friends’ networks and job finding rates," ISER Working Paper Series 2011-21, Institute for Social and Economic Research.
    14. Judith K. Hellerstein & Melissa Mcinerney & David Neumark, 2010. "Spatial Mismatch, Immigrant Networks, and Hispanic Employment in the United States," Annals of Economics and Statistics, GENES, issue 99-100, pages 141-167.
    15. Fredrik Andersson & Mónica García-Pérez & John Haltiwanger & Kristin McCue & Seth Sanders, 2014. "Workplace Concentration of Immigrants," Demography, Springer;Population Association of America (PAA), vol. 51(6), pages 2281-2306, December.
    16. Xin, Guangyi, 2017. "Social Interaction and Labour Market Outcomes," MPRA Paper 80976, University Library of Munich, Germany.
    17. Simon Gemkow & Michael Neugart, 2011. "Referral hiring, endogenous social networks, and inequality: an agent-based analysis," Journal of Evolutionary Economics, Springer, vol. 21(4), pages 703-719, October.
    18. Rebien, Martina, 2019. "Do social networks mitigate stigma effects from long-term unemployment?," IAB-Discussion Paper 201916, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    19. Niki Dickerson Lockette & William E. Spriggs, 2016. "Wage Dynamics and Racial and Ethnic Occupational Segregation Among Less-Educated Men in Metropolitan Labor Markets," The Review of Black Political Economy, Springer;National Economic Association, vol. 43(1), pages 35-56, March.

    More about this item

    Keywords

    immigrants; networks; race; ethnicity;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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