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Social Ties and the Job Search of Recent Immigrants

  • Deepti Goel
  • Kevin Lang

We show that increasing the probability of obtaining a job offer through a network should raise the observed wages of workers in jobs found through formal channels relative to those in jobs found through the network. This prediction holds at all percentiles except the highest and lowest. The largest changes are likely to occur below the median of the offer distribution. We test and confirm these implications using a survey of recent immigrants into Canada. We develop a simple structural model consistent with the theoretical model and show that it can replicate the broad patterns in the data. Our results are consistent with the primary effect of network strength being to increase the arrival rate of offers rather than to alter the distribution from which offers are drawn at least among recent immigrants.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15186.

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Date of creation: Jul 2009
Handle: RePEc:nbr:nberwo:15186
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