Party On: The Labor Market Returns to Social Networks in Adolescence

Adriana Lleras-Muney; Matthew Miller; Shuyang Sheng; Veronica Sovero

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arXiv · 2210.09426

Party On: The Labor Market Returns to Social Networks in Adolescence

Adriana Lleras-Muney·Matthew Miller·Shuyang Sheng·Veronica Sovero

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Abstract

We investigate the returns to adolescent friendships on earnings in adulthood using data from the National Longitudinal Study of Adolescent to Adult Health. Because both education and friendships are jointly determined in adolescence, OLS estimates of their returns are likely biased. We implement a novel procedure to obtain bounds on the causal returns to friendships: we assume that the returns to schooling range from 5 to 15% (based on prior literature), and instrument for friendships using similarity in age among peers. Having one more friend in adolescence increases earnings between 7 and 14%, substantially more than OLS estimates would suggest.

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BibTeX RIS

Adriana Lleras-Muney, Matthew Miller, Shuyang Sheng, Veronica Sovero. 2022-10-17. Party On: The Labor Market Returns to Social Networks in Adolescence. https://arxiv.org/abs/2210.09426

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