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

37 Pages Posted: 22 Jan 2017

See all articles by Elke J. Jahn

Elke J. Jahn

Institute for Employment Research (IAB); University of Bayreuth; IZA Institute of Labor Economics

Michael Neugart

Technical University of Darmstadt

Multiple version iconThere are 2 versions of this paper

Date Written: January 2017

Abstract

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 a worker who lost his 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 having a job six months after displacement by 0.9 percentage points. The neighborhood effect seems to be driven not by social norms but by information transmission at the neighborhood level, and additionally by networks of former co-workers who also lost their jobs due to plant closure.

Keywords: social networks, job search, neighborhood, employment, wages, plant closures

JEL Classification: J63, J64, R23

Suggested Citation

Jahn, Elke J. and Neugart, Michael, Do Neighbors Help Finding a Job? Social Networks and Labor Market Outcomes after Plant Closures (January 2017). IZA Discussion Paper No. 10480, Available at SSRN: https://ssrn.com/abstract=2903102

Elke J. Jahn (Contact Author)

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

University of Bayreuth ( email )

Bayreuth, 95447
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Michael Neugart

Technical University of Darmstadt ( email )

Hochschulstra├če 1
Darmstadt, 64289
Germany

HOME PAGE: http://www.vwl3.wi.tu-darmstadt.de

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