Network-Mediated Hiring and Long-Run Labor Market Outcomes: Evidence from the NLSY97

• Martin Jacard Falck, Economics, University of Delaware

• Thomas Bridges, Economics, University of Delaware

This work asks whether the type of social connection through which young people get their first job affects their economic outcomes decades later. We use the National Longitudinal Survey of Youth 1997 (NLSY97), which records the relationship between respondents and the person who hired them into their first job. This lets us distinguish family-derived ties (parents, relatives, family friends), self-generated ties (own friends, neighbors, acquaintances), and no personal tie. Among college attendees, access to family-derived ties is stratified by class: respondents hired through family connections come from households with higher income and more parental education than those hired without connections. Self-generated ties show no class gradient. Stratified access does not produce stratified returns, however. Across specifications controlling for cognitive ability (ASVAB), parental income, parental education, and institutional type, estimated on a constant sample, neither tie type predicts hourly wages roughly two decades later. Point estimates fall below 2.5 log points with the full control set, and coefficient stability analysis (Oster 2019) indicates the results are not driven by selection on observables. The null holds across parental income terciles, which rules out both compounding advantage for the privileged and compensatory effects for the disadvantaged. Cognitive ability and parental income absorb the entire raw association, consistent with Mouw’s (2003) homophily critique: network-mediated hiring reflects economic advantage rather than producing it, at least in this population. Educational attainment shows positive but imprecise associations with both tie types. Adolescent network access appears to operate as a marker of family resources, not an independent channel of mobility. The question this raises for future work is whether network closure generates real returns in adult professional and institutional settings instead.