Labor Market Networks and Recovery from the Great Recession

Awarded Scholars:
David Neumark, University of California, Irvine
Judith Hellerstein, University of Maryland
Mark Kutzbach, Federal Deposit Insurance Corporation
Project Date:
Jul 2014
Award Amount:
Project Programs:
Future of Work

Since the pioneering work of Mark Granovetter, sociologists and other social scientists have investigated the role of social networks (or social capital) in finding jobs. Results point to the powerful influence that social relationships have in matching people with jobs. Recent research in labor economics also shows that finding jobs through informal contacts such as friends, relatives, and other acquaintances is widespread. For example, connections between people who attend the same school or who belong to the same racial or ethnic group matter for finding out about and getting jobs. Thus, the employment of an individual is likely to be boosted by the employment of others in his/her network.

Neumark, Hellerstein and Kutzbach’s work to date has focused on employed individuals. They have examined the spatial dimensions of labor market networks, including the extent to which knowing or not knowing one’s neighbors is associated with their likelihood of working for the same employer, in the same establishment. Now, they will examine the importance of neighborhood-based labor market networks in helping non-employed workers in general, and displaced workers in particular, find work. They note that this issue is important because of the large job losses that accompanied the Great Recession and the continuing high rates of unemployment and low rates of labor force participation. They will also analyze the attributes of neighborhoods that are networked in ways that increase the flow of labor market information and promote good matches.


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