Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes

Patrick Bayer, Stephen Ross and Giorgio Topa

No 28433, Center Discussion Papers from Yale University, Economic Growth Center

Abstract: We use a novel dataset and research design to empirically detect the effect of social interactions among neighbors on labor market outcomes. Specifically, using Census data that characterize residential and employment locations down to the city block, we examine whether individuals residing in the same block are more likely to work together than those in nearby blocks. We find evidence of significant social interactions operating at the block level: residing on the same versus nearby blocks increases the probability of working together by over 33 percent. The results also indicate that this referral effect is stronger when individuals are similar in sociodemographic characteristics (e.g., both have children of similar ages) and when at least one individual is well attached to the labor market. These findings are robust across various specifications intended to address concerns related to sorting and reverse causation. Further, having determined the characteristics of a pair of individuals that lead to an especially strong referral effect, we provide evidence that the increased availability of neighborhood referrals has a significant impact on a wide range of labor market outcomes including employment and wages.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
Pages: 37
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

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https://ageconsearch.umn.edu/record/28433/files/dp050927.pdf (application/pdf)

Related works:
Working Paper: Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes (2005)
Working Paper: Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes (2005)
Working Paper: Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes (2005)
Working Paper: Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes (2005)
Working Paper: Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:yaleeg:28433

DOI: 10.22004/ag.econ.28433

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