Presentation of paper

Friends’ Networks and Job Finding Rates

Speaker

Lorenzo Cappellari - Università Cattolica di Milano 

Abstract

Lorenzo Cappellari with K. Tatsiramos, IZA

We investigate the effect of social interactions on labor market outcomes using a direct measure of social contacts based on information about individuals’ three best friends and their characteristics. We find that an additional employed friend increases the job finding probability by 3.7 percentage points. This finding is robust to specifications that address the endogeneity of friends’ employment status, including fixed effects and instrumental variable estimations. We also find evidence of higher wages and employment stability for those with more employed friends, which is consistent with networks acting as an information transmission mechanism.

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