Michael E. Rose (Max Planck Institute for Innovation and Competition)
We demonstrate the importance of ‘social connections’ in the labor market by studying the placement outcomes of doctoral students in Economics. We show that a PhD adviser’s connectedness in the co-author network matters for her student’s academic placement. An adviser’s connectedness is measured by her Eigenvector centrality rank in the co-author network deﬁned by more than 100,000 coauthored research articles. Students of more connected advisers obtain a better initial placement compared to students of less connected advisers. We identify the impact of adviser connectedness via changes in the centrality of the adviser’s co-authors in a model with adviser-ﬁxed effects. Additionally, we use the deaths of faculty members as an exogenous shock to show that the probability of a student being placed at a particular department reduces when the collaboration intensity between the student’s school and that department decreases due to the death. Our results contain a more general insight for any labor market - even in direct connections can signiﬁcantly affect job market outcomes.