Working Paper: NBER ID: w18763
Authors: Judith K. Hellerstein; Mark J. Kutzbach; David Neumark
Abstract: We test for evidence of spatial, residence-based labor market networks. Turnover is lower for workers more connected to their neighbors generally and more connected to neighbors of the same race or ethnic group. Both results are consistent with networks producing better job matches, while the latter could also reflect preferences for working with neighbors of the same race or ethnicity. For earnings, we find a robust positive effect of the overall residence-based network measure, whereas we usually find a negative effect of the same-group measure, suggesting that the overall network measure reflects productivity-enhancing positive network effects, while the same-group measure may capture a non-wage amenity.
Keywords: labor market networks; spatial dimension; turnover; earnings; residence-based networks
JEL Codes: J15; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| stronger connections to neighbors (D85) | lower turnover rates among workers (J63) |
| share of coworkers from the same racial or ethnic group (J15) | lower turnover rates among workers (J63) |
| stronger connections to neighbors (D85) | higher earnings (J31) |
| share of coworkers from the same racial or ethnic group (J15) | higher earnings (J31) |
| stronger connections to neighbors (D85) | lower turnover rates (J63) |
| share of coworkers from the same racial or ethnic group (J15) | lower turnover rates (J63) |