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Do Labor Market Networks Have An Important Spatial Dimension?

  • Judith K. Hellerstein
  • Mark J. Kutzbach
  • David Neumark

We test for evidence of spatial, residence-based labor market networks. Turnover is lower for workers more connected to their neighbors generally and more connected to neighbors of the same race or ethnic group. Both results are consistent with networks producing better job matches, while the latter could also reflect preferences for working with neighbors of the same race or ethnicity. For earnings, we find a robust positive effect of the overall residence-based network measure, whereas we usually find a negative effect of the same-group measure, suggesting that the overall network measure reflects productivity-enhancing positive network effects, while the same-group measure may capture a non-wage amenity.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18763.

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Date of creation: Feb 2013
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Publication status: published as Hellerstein, Judith K. & Kutzbach, Mark J. & Neumark, David, 2014. "Do labor market networks have an important spatial dimension?," Journal of Urban Economics, Elsevier, vol. 79(C), pages 39-58.
Handle: RePEc:nbr:nberwo:18763
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