Working Paper: NBER ID: w15186
Authors: Deepti Goel; Kevin Lang
Abstract: We show that increasing the probability of obtaining a job offer through a network should raise the observed wages of workers in jobs found through formal channels relative to those in jobs found through the network. This prediction holds at all percentiles except the highest and lowest. The largest changes are likely to occur below the median of the offer distribution. We test and confirm these implications using a survey of recent immigrants into Canada. We develop a simple structural model consistent with the theoretical model and show that it can replicate the broad patterns in the data. Our results are consistent with the primary effect of network strength being to increase the arrival rate of offers rather than to alter the distribution from which offers are drawn at least among recent immigrants.
Keywords: No keywords provided
JEL Codes: J31; J61; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| stronger social networks (Z13) | probability of receiving job offers (J68) |
| probability of receiving job offers (J68) | wages (J31) |
| stronger social networks (Z13) | wages for job finding through networks (J31) |
| stronger social networks (Z13) | arrival rate of job offers (J68) |
| stronger social networks (Z13) | wage distributions (J31) |
| interaction between network strength and job finding method (D85) | negative coefficient for lower quantiles of wage distribution (J31) |