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Title: The Effects of Social Networks on Wages: A Cross-City Analysis
Citation Type: Miscellaneous
Publication Year: 2014
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Abstract: I evaluate the wage impacts from exogenous and endogenous peer effects within different metropolitan areas. I construct comparison groups for workers within the same industry and PUMA residence based on support from existing literature on social networks, and estimate peer and network effects in a spatial auto-regressive model with a network structure that incorporates group fixed effects. Inclusion of these effects reveals that both observed and unobserved factors within each network have significant effects on individual outcomes. This is the first attempt to estimate the social effects on wages using the spatial econometric approach proposed by Lee (Journal of Econometrics 2007; 140(2), 333-374). The industry-PUMA combination is a statistical association that merges geographic and social space for a new perspective on the realm of spatial effects. The model includes spatial autoregressive processes in the dependent variable. I find limited evidence of spillover (endogenous) effects, which vary significantly across the cities in the analysis. JEL-Classification: J31, C31
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Authors: Movsesyan, Gabriel
Publisher: The City University of New York
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure
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