Do Parental Networks Pay Off? Linking Children's Labor-Market Outcomes to Their Parents' Friends

Erik Plug, Bas van der Klaauw, Lennart Ziegler

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Abstract

In this paper, we examine whether children are better off if their parents have more elaborate social networks. Using data on high-school friendships of parents, we analyze whether the number and characteristics of friends affect the labor-market outcomes of children. While parental friendships formed in high school appear long lasting, we find no significant impact on their children's occupational choices and earnings prospects. These results do not change when we account for network endogeneity, network persistency, and network measurement error. Only when children enter the labor market do friends of parents have a marginally significant but small influence on their occupational choice.

Original languageEnglish
Pages (from-to)268-295
Number of pages28
JournalScandinavian Journal of Economics
Volume120
Issue number1
Early online date28 Dec 2017
DOIs
Publication statusPublished - 17 Jan 2018

Keywords

  • Informal job search
  • intergenerational effects
  • occupational choice
  • social networks

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