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

Patrick Bayer, Stephen Ross and Giorgio Topa

No 11019, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use a novel 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 socio-demographic 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 labor force participation, hours and earnings.

JEL-codes: J41 R14 (search for similar items in EconPapers)
Date: 2005-01
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
Note: LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (65)

Published as Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2008. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1150-1196, December.

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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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