Online Social Network Effects in Labor Markets: Evidence From Facebook's Entry into College Campuses
75 Pages Posted: 16 May 2019 Last revised: 15 Sep 2021
Date Written: May 2, 2019
Using quasi-random variation from Facebook’s entry to college campuses, I exploit a natural experiment to estimate the effect of online social network access on future earnings. My estimates imply that access to Facebook for an additional year in college causes a .61 percentile increase in a cohort’s average earnings, translating to an average wage increase of around $970 in 2014. My
results also suggest that Facebook access decreases income inequality within a cohort. I provide evidence that wage increases comes through the channel of in creased social ties to former classmates, which leads to strengthened employment networks between college alumni.
Keywords: social networks, labor economics, education, Facebook, technology, online platforms
JEL Classification: I23, J62, J30, D85
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