Conference Paper 9th Conference on Research on Economic Theory & Econometrics, held 7-11 July, 2010, Tinos, Crete

Friends' networks and job finding rates

Authors

Publication date

2010

Abstract

We investigate the effect of social interactions on labor market outcomes using a direct measure of social contacts based on information about individuals’ three best friends and their characteristics. We examine the effect of the number of employed friends on the transition from non-employment to employment, and we find the existence of significant network effects at the individual level. An additional employed friend increases the probability of finding a job by 3.7 percentage points. This finding is robust to specifications that address the endogeneity of friends’ employment status, which may be induced by correlation with unobserved individual attributes and feedback effects. Considering labor market outcomes, we find evidence of higher wages and employment stability for those with more employed friends, which is consistent with networks acting as an information transmission mechanism.

Subjects

Labour Market and Unemployment

Links

http://www.aueb.gr/conferences/Crete2010/Senior/Tatsiramos_October2010.pdf

Related publications

1. Friends’ networks and job finding rates

   Lorenzo Cappellari and Konstantinos Tatsiramos

   ISER Working Paper Series, 2011-21 - 10 Aug 2011 - download  
   1. Labour Market
   2. Unemployment
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