PARENTS' SOCIAL NETWORK, JOB LOCATION, AND GRADUATE WAGES: EVIDENCE BASED ON THE FIRST JOBS OF GRADUATES FROM A CHINESE COLLEGE

This study investigates the effects of parents' social network (PSN) and job location on graduate wages by using a unique dataset from one Chinese college. First, PSN significantly increases wage premium. Secondly, although graduates who work in their hometowns do not earn higher incomes than those who work outside their hometowns, the former significantly benefit from their PSN. Thirdly, the nepotism channel of PSN may be more important than the information channel, and PSN is more important for female graduates. Our results exhibit robustness to endogeneity. This paper emphasizes the importance of social networks and provides evidence on the intergenerational immobility of socioeconomic status, which raises significant policy implications.