Do Neighbors Help Finding a Job? Social Networks and Labor Market Outcomes after Plant Closures

35 Pages Posted: 8 Mar 2016 Last revised: 23 Sep 2016

Elke J. Jahn

Institute for Employment Research (IAB); University of Bayreuth; IZA Institute of Labor Economics

Michael Neugart

Technische Universität Darmstadt

Multiple version iconThere are 2 versions of this paper

Date Written: September 22, 2016

Abstract

Social networks may affect individual workers' labor market outcomes. Using rich spatial data from administrative records, we analyze whether neighbors' employment status influences an individual worker's employment probability after plant closure and, if hired, his wage. Our findings suggest that a 10 percentage point higher neighborhood employment rate increases the probability of having a job after six months by 0.9 percentage points and daily earnings by 1.7 percent. The neighborhood effect seems not to be driven by social norms but information transmission via neighborhoods and, additionally, via former co-worker networks.

Keywords: social networks, job search, neighborhood, employment, wages, plant closures

JEL Classification: J63, J64, R23

Suggested Citation

Jahn, Elke J. and Neugart, Michael, Do Neighbors Help Finding a Job? Social Networks and Labor Market Outcomes after Plant Closures (September 22, 2016). Available at SSRN: https://ssrn.com/abstract=2743389 or http://dx.doi.org/10.2139/ssrn.2743389

Elke J. Jahn

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

University of Bayreuth ( email )

Bayreuth, 95447
Germany

IZA Institute of Labor Economics ( email )

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

Michael Neugart (Contact Author)

Technische Universität Darmstadt ( email )

Bleichstraße 2
Darmstadt, 64283
Germany

HOME PAGE: http://www.vwl3.wi.tu-darmstadt.de/fachgebiete_10/startseite_6/index.en.jsp

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