Do Labor Market Networks Have An Important Spatial Dimension?
We test for evidence of spatial, residence-based labor market networks. Turnover is lower for workers more connected to their neighbors generally and more connected to neighbors of the same race or ethnic group. Both results are consistent with networks producing better job matches, while the latter could also reflect preferences for working with neighbors of the same race or ethnicity. For earnings, we find a robust positive effect of the overall residence-based network measure, whereas we usually find a negative effect of the same-group measure, suggesting that the overall network measure reflects productivity-enhancing positive network effects, while the same-group measure may capture a non-wage amenity.
We are grateful to Gilles Duranton, Kristin McCue, Erika McEntarfer, Henry Overman, and Giorgio Topa for helpful comments. Any opinions and conclusions expressed herein are those of the author(s) and do not necessarily represent the views of the U.S. Census Bureau. All results have been reviewed to ensure that no confidential information is disclosed. This research uses data from the Census Bureau's Longitudinal Employer Household Dynamics Program, which was partially supported by the following National Science Foundation Grants - SES-9978093, SES-0339191, and ITR-0427889; a National Institute on Aging Grant AG018854, and grants from the Alfred P. Sloan Foundation. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Hellerstein, Judith K. & Kutzbach, Mark J. & Neumark, David, 2014. "Do labor market networks have an important spatial dimension?," Journal of Urban Economics, Elsevier, vol. 79(C), pages 39-58. citation courtesy of