Job search methods and immigrant earnings: A longitudinal analysis of the role of bridging social capital

Abstract

This paper analyses how finding a new job affects the earnings of immigrants. I hypothesize that job changes are more successful for individuals who have access to bridging social capital. Using data from the German Socio-economic Panel (1996–2011), fixed-effects models show that finding a new job results in higher earnings only when immigrants have both native German friends and high levels of human capital. The effect is, however, not dependent on the search method: both formal (advertisement, employment agency), and informal search methods (referrals via friends) result in higher earnings. The presented evidence shows that bridging social capital can be activated and converted into a better position on the labour market. However, the effect of contact with natives is limited to those who are higher educated, or who have good German language proficiency, suggesting that only those individuals who are better off already profit from bridging social capital.