Do Parental Networks Pay Off? Linking Children's Labor-Market Outcomes to Their Parents' Friends

46 Pages Posted: 1 Jun 2015

See all articles by Erik Plug

Erik Plug

University of Amsterdam - Amsterdam School of Economics (ASE); Tinbergen Institute; IZA Institute of Labor Economics

Bas van der Klaauw

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Lennart Ziegler

University of Vienna

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Abstract

This paper examines whether children are better off if their parents have stronger social networks. Using data on high-school friendships of parents, we analyze whether the number and characteristics of friends affect the labor-market outcomes of children. While parental friendships formed in high school appear long lasting, we find no significant impact on their children's occupational choices and earnings prospects. These results do not change when we account for network endogeneity, network persistency and network measurement error. Only when children enter the labor market, we find that friends of parents have a marginally significant but small influence on the occupational choice of children.

Keywords: social networks, occupational choice, informal job search, intergenerational effects

JEL Classification: A14, J24, J46, J62

Suggested Citation

Plug, Erik and van der Klaauw, Bas and Ziegler, Lennart, Do Parental Networks Pay Off? Linking Children's Labor-Market Outcomes to Their Parents' Friends. IZA Discussion Paper No. 9074. Available at SSRN: https://ssrn.com/abstract=2612326

Erik Plug (Contact Author)

University of Amsterdam - Amsterdam School of Economics (ASE) ( email )

Roetersstraat 11
1018 WB Amsterdam
Netherlands
+31 20 5254311 (Phone)
+31 20 5254310 (Fax)

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Bas Van der Klaauw

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6120 (Phone)
+31 20 444 6005 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Lennart Ziegler

University of Vienna ( email )

Oskar-Morgenstern-Platz 1
Vienna, 1090
Austria

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