Journal Article

Social Networks and the Dynamics of Labour Market Outcomes: Evidence from Refugees Resettled in the U.S.

Lori A. Beaman

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 79, issue 1, pages 128-161
Published in print January 2012 | ISSN: 0034-6527
Published online August 2011 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1093/restud/rdr017
Social Networks and the Dynamics of Labour Market Outcomes: Evidence from Refugees Resettled in the U.S.

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This paper examines the dynamic implications of social networks for the labour market outcomes of refugees resettled in the U.S. A theoretical model of job information transmission shows that the relationship between social network size and labour market outcomes is heterogeneous and depends on the vintage of network members: an increase in network size can negatively impact some cohorts in a network while benefiting others. To test this prediction, I use new data on political refugees resettled in the U.S. and exploit the fact that these refugees are distributed across cities by a resettlement agency, precluding individuals from sorting. The results indicate that an increase in the number of social network members resettled in the same year or one year prior to a new arrival leads to a deterioration of outcomes, while a greater number of tenured network members improves the probability of employment and raises the hourly wage.

Keywords: Social networks; labour market outcomes; dynamics; j64; J61; J31

Journal Article.  15255 words.  Illustrated.

Subjects: Economics

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