Social Capital and Economic Integration. The Case of Immigrants to Australia

Natalia C. Malancu, Universitat Pompeu Fabra
Mathew J. Creighton, University of Massachusetts at Boston

A clear understanding of the role of social networks in initial post-migration employment and occupational mobility is crucial to the process of immigrant economic incorporation, particularly in skill selective contexts. We build upon job search literature in three ways. First, we account for the search process of those employed and focus on networks as one of many search methods. Second, we assess the impact of network search on employability, factoring in social capital. Third, we recast Montgomery's(1992) model for the network effect on initial occupational mobility. To these ends, we use 1993-95 Longitudinal Survey of Immigrants to Australia data. We find that network involvement in job search increases the odds of entering employment. We reveal lower employment returns to network involvement at higher training. We uncover little evidence of a network effect on the relative risk of experiencing downward mobility as opposed to no mobility. We conclude a reassessment of network measures and policy-aware interpretations.