Understanding the Role of Social Networks on Labor Market Outcomes Using a Large Dataset from a Mobile Network

We use a new and unique dataset combining social network data from Call Detail Records with employment information on mobile phone subscribers to study the role of information networks on job market outcomes. The novel contribution of our work is to focus on the effect of actual social connections beyond that associated to living in the same neighborhood. We find that the propensity to work together is two orders of magnitude greater for a pair of neighbors who call each other than that for a pair of neighbors who do not, suggesting that actual social ties play a significant role in learning about job opportunities. We also find that social networks play a stronger role in less privileged neighborhoods, which provides some evidence that social networks may be unable to mitigate the insulation problems of such neighborhoods