Do Labor Market Networks Have an Important Spatial Dimension?

51 Pages Posted: 2 Feb 2013

See all articles by Judith K. Hellerstein

Judith K. Hellerstein

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

Mark J. Kutzbach

Federal Deposit Insurance Corporation

David Neumark

University of California, Irvine - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Multiple version iconThere are 3 versions of this paper

Date Written: February 2013

Abstract

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.

Suggested Citation

Hellerstein, Judith K. and Kutzbach, Mark J. and Neumark, David, Do Labor Market Networks Have an Important Spatial Dimension? (February 2013). NBER Working Paper No. w18763. Available at SSRN: https://ssrn.com/abstract=2210782

Judith K. Hellerstein (Contact Author)

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Mark J. Kutzbach

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David Neumark

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