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Do Parental Networks Pay Off? Linking Children's Labor‐Market Outcomes to Their Parents' Friends
Author(s) -
Plug Erik,
Klaauw Bas,
Ziegler Lennart
Publication year - 2018
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/sjoe.12227
Subject(s) - endogeneity , earnings , affect (linguistics) , economics , labour economics , demographic economics , psychology , econometrics , accounting , communication
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.