Social Ties and the Job Search of Recent Immigrants

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Social Ties and the Job Search of Recent ImmigrantsIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. In this paper we highlight a specific mechanism through which social networks help in job search. We characterize the strength of a network by its likelihood of providing a job offer. Using a theoretical model we show that the wage differential in jobs found using networks versus those found using formal channels, decreases as the network becomes stronger. We verify this result for recent immigrants to Canada for whom a strong network is captured by the presence of a 'close tie.' Furthermore, structural estimates confirm that the presence of a close tie operates by increasing the likelihood of generating a job offer from the network rather than by altering the wage distribution from which an offer is drawn.JEL Classification: J3

The Impact of Communal Organizational Density on the Labour Market Integration of Immigrants in Canada

“…Immigrant entrepreneurship and self‐employment are clearly associated with dense communal structures, as other studies have noted (Light and Bonacich, 1991). The negative impact on wages appears to be small, and mitigated by a positive relationship with employment, as previous studies have also noted (Goel, 2007, Li and Dong, 2007). Debates are likely to continue about the relationship between various dimensions of social capital and the economic attainment of immigrants.…”

Referral-based Job Search Networks

“…We obtain these by first separately estimating wage and turnover regressions based on 6-year windows of the universe of social security records. 25 Depending on the outcome variable we study,…”

“…For instance, while Hensvik and Skans (2013) systematically test and provide support for Montgomery's (1991) referral model whereby referrals allow firms to attract workers with high unobserved (to the market) productivity, Heath (2013) provides evidence that firms use referrals in order to mitigate limited liability (moral hazard) problems. Schmutte (2014) develops a search model in which workers who are connected to workers earning high wages are assumed to draw from a better wage offer distribution than workers who are connected to workers earning low wages, while Goel and Lang (2009) focus on the effects of networks on wages which arise through the number of job offers strongly and weakly connected workers may receive. Bandiera et al (2009) and Beaman and Magruder (2012) study how favoritism or the type of referral changes in response to different incentive schemes.…”

Immigrant job search assimilation in Canada

“…A number of papers have documented that workers utilize friends and relatives when searching for a job, and recent work indicates that social networks are especially important for newly arrived immigrants. Using the Longitudinal Survey of Immigrants to Canada (LSIC), Goel and Lang () find that having close friends or relatives in Canada significantly increases the likelihood that recently arrived immigrants will find employment within the first six months of their arrival . Other examples include Munshi (), who documents that use of social networks is very common in acquiring employment for Mexican migrant workers in the U.S., and Frijters et al.…”