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Do neighbors help finding a job? Social networks and labor market

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  • Jahn, Elke Jutta
  • Neugart, Michael

Abstract

Social networks may affect individual workers' labor market outcomes. Using rich spatial data from administrative records, we analyze whether neighbors' employment status influences an individual worker's employment probability after establishment closure and, if hired, his wage. Our findings suggest that a 10 percentage point higher neighborhood employment rate increases the probability of having a job after six months by 0.8 percentage points and daily earnings by 1.7 percent. The neighborhood effect seems not to be driven by social norms but information transmission via neighborhoods and, additionally, via former co-worker networks.

Suggested Citation

  • Jahn, Elke Jutta & Neugart, Michael, 2016. "Do neighbors help finding a job? Social networks and labor market," VfS Annual Conference 2016 (Augsburg): Demographic Change 145476, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145476
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    More about this item

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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