Labor Market Networks and Recovery from Mass Layoffs Before, During, and after the Great Recession

61 Pages Posted: 11 Jun 2015

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

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Date Written: June 1, 2015

Abstract

We test the effects of labor market networks defined by residential neighborhoods on re-employment following mass layoffs. We develop two measures of labor market network strength. One captures the flows of information to job seekers about the availability of job vacancies at employers of workers in the network, and the other captures referrals provided to employers by other network members. These network measures are linked to more rapid re-employment following mass layoffs, and to re-employment at neighbors’ employers. We also find evidence that network connections – especially those that provide information about job vacancies – became less productive during the Great Recession.

Suggested Citation

Hellerstein, Judith K. and Kutzbach, Mark J. and Neumark, David, Labor Market Networks and Recovery from Mass Layoffs Before, During, and after the Great Recession (June 1, 2015). US Census Bureau Center for Economic Studies Paper No. CES-WP-15-14. Available at SSRN: https://ssrn.com/abstract=2616877 or http://dx.doi.org/10.2139/ssrn.2616877

Judith K. Hellerstein (Contact Author)

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Mark J. Kutzbach

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David Neumark

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