Do Neighbors Help Finding a Job? Social Networks and Labor Market Outcomes After Plant Closures

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 28.09.2017, 12:15 - 13:30


Presentation by 

Elke J. Jahn (University of Bayreuth)


Social networks may affect workers' labor market outcomes. Using rich spatial data from administrative records, we analyze whether the employment status of neighbors influences the employment probability of workers who lost their job due to a plant closure and the channels through which this occurs. Our findings suggest that a ten percentage point higher neighborhood employment rate increases the probability of finding a job by almost one percentage point. On top of that we show that displaced workers benefit from neighborhood networks in terms of higher earnings, and longer job stability. These findings indicate that information about vacancies are transferred by neighbors and that social norms do not play a role.

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