Working Paper: NBER ID: w14201
Authors: Judith K. Hellerstein; Melissa McInerney; David Neumark
Abstract: We specify and implement a test for the presence and importance of labor market network based on residential proximity in determining the establishments at which people work. Using matched employer-employee data at the establishment level, we measure the importance of these network effects for groups broken out by race, ethnicity, and various measures of skill. The evidence indicates that these types of labor market networks do exist and play an important role in determining the establishments where workers work, that they are more important for minorities and the less-skilled, especially among Hispanics, and that these networks appear to be race-based.
Keywords: Labor Market Networks; Residential Proximity; Employment Outcomes; Racial Disparities
JEL Codes: J15; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Residential proximity (R20) | Employment at the same establishment (J63) |
| Residential labor market networks (R23) | Employment outcomes (J68) |
| Residential labor market networks (R23) | Job referrals (J68) |
| Residential labor market networks (R23) | Reduced search frictions (D83) |
| Residential proximity (R20) | Job referrals (J68) |
| Residential proximity (R20) | Reduced search frictions (D83) |
| Race-based networks (J15) | Employment outcomes (J68) |
| Residential labor market networks (R23) | Disparities in employment (J79) |