Occupational mismatch and network effects: Evidence from France

Abstract : How does the social environment of immigrants influence the probability of being in an occupational mismatch situation? To answer this question, we use the Labor Force Survey (2005-2012) to assess the impact of peers and the neighborhood on the use of referees to find a job on the one hand, and the probability of being in occupational mismatch situation on the other hand. With a probit model, we estimate the probability of using a referee to find a job as well as the probability of being in an occupational mismatch situation for immigrants. Endogeneity is controlled with a recursive bivariate probit model for the use of a referee to find a job and the probability of being in an occupational mismatch situation. The results show that the neighborhood effect has a greater effect than the peer effect on using referees to find a job. Moreover, the role of the referee on the probability of being in an occupational mismatch situation is not homogeneous according to the origins.