Immigrant Birth-country Networks and Unemployment Duration around the Great Recession: a Repeated Cross-Sectional Analysis

This paper examines the role of birth-country networks on immigrants' unemployment duration around the Great Recession using monthly Current Population Survey data from 2001 – 2013. and finds that immigrant birth-country networks have an important role in lowering unemployment duration, particularly during the economic crisis. We use Guell-Hu (2006) model for repeated cross-sectional data with uncompleted unemployment spells and analyze unemployment duration at an individual level. In the absence of panel data analyzing unemployment using repeated cross sectional methods is very crucial. We find that birth-country networks measured at the state level significantly lower unemployment duration for all immigrants, particularly during the economic crisis and longer the immigrant is unemployed, less effective are her social networks in job search. Varying the effect of networks over duration categories the authors show that networks are more effective in lowering duration for immigrants unemployed for 1-2 months than for immigrants who are unemployed for longer periods and this effect is stronger during the post-recession period than the pre-recession period. The findings are robust to different specifications and measures of networks including those measured at the local MSA level.