Job Referrals and Immigrants’ Occupational Status. The role of Bridging Social Capital

Using longitudinal data from the German Socioeconomic Panel (1986-2005), this paper analyzes how job referrals affect the occupational status of immigrants in Germany. This allows me to examine whether access to bridging social capital can be activated and converted into a better position on the labor market.

Random effects and fixed effects models show that job referrals from friends only result in a higher occupational status if immigrants have contacts with natives. Referrals affect occupational status negatively if people do not have contacts with natives. Furthermore, for immigrants with a German spouse, almost all job changes are more beneficial than for people who have a co-ethnic spouse, regardless of the search method used. 

It is concluded that for immigrants, job referrals are only valuable if they go together with possessing bridging social capital. This implies that contacts with natives not only provide access to valuable resources, but these can be activated too.