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

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  • Jahn, Elke J.

    (University of Bayreuth)

  • Neugart, Michael

    (Darmstadt University of Technology)

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.

Suggested Citation

  • Jahn, Elke J. & Neugart, Michael, 2017. "Do Neighbors Help Finding a Job? Social Networks and Labor Market Outcomes After Plant Closures," IZA Discussion Papers 10480, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10480
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    Cited by:

    1. Peter Haller & Daniel F. Heuermann, 2020. "Opportunities and competition in thick labor markets: Evidence from plant closures," Journal of Regional Science, Wiley Blackwell, vol. 60(2), pages 273-295, March.
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    3. Adan Silverio‐Murillo & Lauren Hoehn‐Velasco & Jose Roberto Balmori de la Miyar, 2023. "Disputes between neighbors in Mexican cities during the COVID‐19 pandemic," Regional Science Policy & Practice, Wiley Blackwell, vol. 15(3), pages 626-643, April.
    4. Philippe Askenazy & Verónica Escudero, 2022. "Dimension géographique des inégalités d’accès à l’emploi," Post-Print halshs-03801734, HAL.

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    More about this item

    Keywords

    plant closures; wages; employment; neighborhood; job search; social networks;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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