Does it pay for immigrants to use social networks?

Using The Special Licence Quarterly Labour Force Survey Corrado Giulietti, Christian Schluter and Jackie Wahba have been investigating the question 'Does it pay for immigrants to use social networks?'

Using 30 waves of the survey, in which individuals report social network use as a job search method and whether the job match was the result of social network use, the project investigates whether relying on personal contacts, as opposed to other formal job search methods, helps individuals to find employment and whether those jobs obtained through friends and family are well-paid or not.

Findings indicate that social networks do not adversely affect the employment opportunities of immigrants once we control for local labour market characteristics, i.e . personal contacts are as efficient as formal job search methods in finding immigrants employment. However it was found that immigrants who obtain their jobs through social networks do incur a wage penalty. This suggests that immigrants might be valuing other non-monetary benefits such as working, or living, with individuals from the same ethnic group that might compensate them for the wage penalty they experience when they get a job through personal contacts.

For more information about the data used in this study please visit the UK Data Archive.

Posted 03/03/2011 13:29