Coworker Networks in the Labour Market

41 Pages Posted: 18 May 2013

See all articles by Albrecht Glitz

Albrecht Glitz

Universitat Pompeu Fabra; Barcelona School of Economics; IPEG

Multiple version iconThere are 2 versions of this paper

Abstract

This paper studies the effect of coworker-based networks on individual labour market outcomes. I analyse how the provision of labour market relevant information by former coworkers affects the employment probabilities and, if hired, the wages of male workers who have previously become unemployed as the result of an establishment closure. To identify the causal effect of an individual worker's network on labour market outcomes, I exploit exogenous variation in the strength of these networks that is due to the occurrence of mass-layoffs in the establishments of former coworkers. The empirical analysis is based on administrative data that comprise the universe of workers employed in Germany between 1980 and 2001.The results suggest a strong positive effect of a higher employment rate in a worker's network of former coworkers on his re-employment probability after displacement: a 10 percentage point increase in the prevailing employment rate in the network increases the re-employment probability by 7.5 percentage points. In contrast, there is no evidence of a statistically significant effect on wages.

Keywords: networks, labour markets, employment, wages

JEL Classification: J63, J64

Suggested Citation

Glitz, Albrecht, Coworker Networks in the Labour Market. IZA Discussion Paper No. 7392, Available at SSRN: https://ssrn.com/abstract=2266819 or http://dx.doi.org/10.2139/ssrn.2266819

Albrecht Glitz (Contact Author)

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas, 25-27
Barcelona, E-08005
Spain

Barcelona School of Economics ( email )

Carrer de Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain

IPEG ( email )

Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
11
Abstract Views
411
PlumX Metrics