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Coworkers, Networks, and Job-Search Outcomes among Displaced Workers

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  • Perihan Ozge Saygin
  • Andrea Weber
  • Michèle A. Weynandt

Abstract

This article examines the mechanisms by which social networks affect the labor market outcomes of displaced workers. The authors draw on administrative records for the universe of private-sector employment in Austria to identify work-related networks among former coworkers. They analyze the importance of social networks for both job seekers and hiring firms. For job seekers, results indicate that having a high share of former coworkers who are currently employed in expanding firms improves job-finding success. For firms seeking to hire new employees, the authors find that a firm is twice as likely to hire a displaced worker with a former-coworker link to one of their current employees than to hire a worker displaced from the same closing firm but without a link. These results suggest that information about job opportunities and demand-side conditions is transmitted in work-related networks between workers and firms.

Suggested Citation

  • Perihan Ozge Saygin & Andrea Weber & Michèle A. Weynandt, 2021. "Coworkers, Networks, and Job-Search Outcomes among Displaced Workers," ILR Review, Cornell University, ILR School, vol. 74(1), pages 95-130, January.
    • Handle: RePEc:sae:ilrrev:v:74:y:2021:i:1:p:95-130
    DOI: 10.1177/0019793919881988
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    4. Forth, John & Theodoropoulos, Nikolaos, 2022. "Earnings Discrimination in the Workplace," GLO Discussion Paper Series 1110, Global Labor Organization (GLO).
    5. Balgova, Maria & Illing, Hannah, 2023. "Job Displacement and Migrant Labor Market Assimilation," IZA Discussion Papers 16349, Institute of Labor Economics (IZA).
    6. Dissanayake, Ruchith, 2021. "Geographic distribution of firms and expected stock returns," Journal of Economic Dynamics and Control, Elsevier, vol. 133(C).
    7. Michelle Hansch & Jan Nimczik & Alexandra Spitz-Oener, 2024. "Workplace Connections and Labor Migration: The Role of Information in Shaping Expectations," Rationality and Competition Discussion Paper Series 490, CRC TRR 190 Rationality and Competition.
    8. Maria Balgova & Hannah Illing, 2023. "Job Displacement and Migrant Labor Market Assimilation," ECONtribute Discussion Papers Series 246, University of Bonn and University of Cologne, Germany.
    9. Yu, Li & Ma, Tiemeng & Wu, Sirong & Lyu, Zhuoyang, 2023. "How does broadband internet affect firm-level labor misallocation: The role of information frictions," China Economic Review, Elsevier, vol. 82(C).
    10. Demir, Gökay & Sandner, Malte & Hertweck, Friederike & Yükselen, Ipek, 2023. "Students' Coworker Networks and Labor Market Entry," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277580, Verein für Socialpolitik / German Economic Association.

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