The Review of Economics and Statistics 2026
The Intergenerational Transmission of Employers and the Earnings of Young Workers
Abstract
This paper investigates how parental connections to firms shape early-career earnings. I use employer-employee linked data to study one important type of connection: jobs obtained at a parent’s employer. Twenty-nine percent of individuals work for a parent’s employer at least once by age 30. Exploiting transitory, firm-specific fluctuations in hiring conditions at the parent’s employer, I estimate that working for a parent’s employer increases initial earnings by 24 percent, primarily by providing access to higher-paying firms. Individuals with higher-earning parents are more likely to work for a parent’s employer and experience larger earnings gains when they do. Consequently, the elasticity of initial earnings with respect to parental earnings would be 12 percent lower if no one found a job through these connections. The findings suggest that connections to firms through one’s social network may be an important determinant of intergenerational mobility.
- DOI
- 10.1162/rest.a.1871
- Pages
- 1-88
- Language
- en
- Sources
- crossref