Social Ties and the Job Search of Recent Immigrants

Abstract

This article highlights a specific mechanism through which social networks help in job search. The authors characterize the strength of a network by its likelihood of providing a job offer. Using a theoretical model, they show that the difference between wages in jobs found using networks versus those found using formal channels decreases as the network becomes stronger. The authors 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 network wage distribution.