Social capital and immigrants' labour market performance

This paper analyses the role of social capital on immigrants' labour market outcomes. We use principal component analysis (PCA) to build an index of social networks and explore its impact on the probability of getting a job and on wage levels using the Households Income and Labour Dynamics in Australia (HILDA) longitudinal survey data (2002-2010). We find a positive effect of social capital on migrants' employment outcomes and wages, especially for women. Distinguishing employment into blue and white-collar jobs, we find that social capital only affects the probability of getting a white-collar job. These results suggest that promoting opportunities to create social capital has a beneficial effect on migrants' integration in the host country.